Advertisement

Effects of Changing Age Structure and Intergenerational Transfers on Patterns of Consumption and Saving

  • Diane J. Macunovich
Part of the International Studies In Population book series (ISIP, volume 3)

This study examines the issue of age-structure transitions and intergenerational transfers from a macro rather than a micro perspective: to what extent might changing age structure, brought about by the demographic transition and subsequent baby booms and busts, have contributed to economic fluctuations experienced in countries around the globe in the last century? And to what extent might intergenerational and interhousehold transfers have confounded attempts to quantify this relationship? These issues are explored here using data for the United States throughout the 20th century, as the United States moved from “developing” to “developed” status.

Keywords

Saving Rate Consumption Expenditure Intergenerational Transfer Relative Cohort Size Personal Consumption Expenditure 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Almon, S. (1965), “The distributed lag between capital appropriations and expenditures.” Econometrica, 33(January):178-196.CrossRefGoogle Scholar
  2. Attanasio, O. P. (1998), “Cohort analysis of saving behavior by U. S. households.” Journal of Human Resources, 33(3):575-560.CrossRefGoogle Scholar
  3. Auerbach, A. J., Cai, J. and Kotlikoff, L. J. (1990), “U. S. demographics and saving: Predictions of three saving models.” NBER Working Paper 3404, Cambridge, MA.Google Scholar
  4. Barlow, R. (1994), “Population growth and economic growth: Some more correlations.” Population and Development Review, 20(1):153-165.CrossRefGoogle Scholar
  5. Berger, M. C. (1984), “Cohort size and the earnings growth of young workers.” Industrial and Labor Relations Review, 37(4):582-591.CrossRefGoogle Scholar
  6. Berger, M. C. (1985), “The effect of cohort size on earnings growth: A re-examination of the evidence.” Journal of Political Economy, 93:561-573.CrossRefGoogle Scholar
  7. Berger, M. C. (1989), “Demographic cycles, cohort size, and earnings.” Demography, 26(2):311-321.CrossRefGoogle Scholar
  8. Bosworth, B., Burtless, G. and Sabelhaus, J. (1991), “The decline in saving: Evidence from household surveys.” Brookings Papers on Economic Activity, 1991(1):183-241.CrossRefGoogle Scholar
  9. Collins, S. M. (1991), “Saving behavior in ten developing countries.” In: National Saving and Economic Performance, J. B. Shoven, ed. pp. 349-375. University of Chicago Press: Chicago.Google Scholar
  10. David, M. H. (1962), Family Composition and Consumption. North-Holland Publishing Co.: Amsterdam.Google Scholar
  11. Deaton, A. and Paxson, C. (1997), “The effects of economic and population growth on national saving and inequality.” Demography, 34(1):97-114.CrossRefGoogle Scholar
  12. Easterlin, R. A. (1987), Birth and Fortune, second edition. University of Chicago Press: Chicago.Google Scholar
  13. Fair, R. C. and Dominguez, K. (1991), “Effects of the changing U. S. age distribution on macroeconomic equations.” American Economic Review, 81(5):1276-1294.Google Scholar
  14. Frost, P. (1975), “Some properties of the Almon lag technique when one searches for degree of polynomial and lag (in Theory and Methods).” Journal of the American Statistical Association, 70(351):606-612.CrossRefGoogle Scholar
  15. Fry, M. J. and Mason, A. (1982), “The variable rate-of-growth effect in the life-cycle saving model.” Economic Inquiry, 20:426-442.CrossRefGoogle Scholar
  16. Godfrey, L. G. and Poskitt, D. S. (1975), “Testing the restrictions of the Almon lag technique (in Theory and Methods).” Journal of the American Statistical Association, 70(349):105-108.CrossRefGoogle Scholar
  17. Harper, C. P. (1977), “Testing for the existence of a lagged relationship within Almon’s method.” Review of Economics and Statistics, 59(2):204-210.CrossRefGoogle Scholar
  18. Higgins, M. (1998), “Demography, national savings, and international capital flows.” International Economic Review, 39(2):343-369.CrossRefGoogle Scholar
  19. Higgins, M. and Williamson, J. G. (1997), “Age structure dynamics in Asia and dependence on foreign capital.” Population and Development Review, 23(2):262-293.CrossRefGoogle Scholar
  20. Higgins, M. and Williamson, J. G. (1999), “Explaining inequality the world round: Cohort size, Kuznets curves, and openness.” NBER Working Paper 7224, Cambridge, MA. http://www.nber.org/papers/w7224
  21. Judge, G. G., Griffiths, W. E., Carter-Hill, R., L ütkepohl, H. and Lee, Tsoung-Chao. (1985), The Theory and Practice of Econometrics, second edition. John Wiley and Sons: New York.Google Scholar
  22. Kelley, A. C. and Schmidt, R. M. (1994), “Population and income change: Recent evidence.” World Bank Discussion Paper 249, August 1994, Washington, DC.Google Scholar
  23. Kelley, A. C. and Schmidt, R. M. (1995), “Aggregate population and economic growth correlations: The role of the components of demographic change.”Demography, 32(4):543-555.CrossRefGoogle Scholar
  24. Korenman, S. and Neumark, D. (2000), “Cohort crowding and youth labor markets: A cross-national analysis.” In: Youth Employment and Joblessness in Advanced Countries, D. G. Blanchflower and R. B. Freeman, eds. pp. 57-105. University of Chicago Press: Chicago.Google Scholar
  25. Lazear, E. P. and Michael, R. T. (1988), Allocation of Income within the Household. Univeristy of Chicago Press: Chicago.Google Scholar
  26. Lebergott, S. (1996), Consumer Expenditures: New Measures and Old Motives. Princeton University Press: Princeton, NJ.Google Scholar
  27. Leff, N. H. (1969), “Dependency rates and savings rates.” American Economic Review 59(5):886-896.Google Scholar
  28. Lino, M. (1998), Expenditures on Children by Families:1997 Annual Report. United States Department of Agri-culture, Center for Nutrition Policy and Promotion, Miscellaneous Publication Number 1528-1997, Washington, DC. Available at http://www.usda.gov/fcs/cnpp/using2. htm
  29. Macunovich, D. J. (1999), “The fortunes of one’s birth: Relative cohort size and the youth labor market in the U. S.” Journal of Population Economics, 12:215-272.CrossRefGoogle Scholar
  30. Macunovich, D. J. (2001), “Lessons from the baby boom: Delayed effects of fertility on patterns of consumption.” http://newton. uor. edu/Departments&Programs/EconomicDept/macunovich/agdemand. pdf
  31. Malthus, T. R. (1817), An Essay on the Principle of Population, selected and introduced by Donald Winch, Cambridge University Press, 1992.Google Scholar
  32. Mason, A. (1981), “An extension of the life-cycle model and its application to population growth and aggregate saving.” East-West Population Institute Working Papers 4 (January).Google Scholar
  33. Mason, A. (1988), “Saving, economic growth, and demographic change.” Population and Development Review, 14(1):113-144.CrossRefGoogle Scholar
  34. Mason, A. (1987), “National saving rates and population growth: A new model and new evidence.” In: Population Growth and Economic development: Issues and Evidence, D. G. Johnson and R. D. Lee, eds. pp. 523-560. University of Wisconsin Press: Madison.Google Scholar
  35. Schmidt, P. and Mann, W. R. (1977), “A note on the approximation of arbitrary distributed lag structures by a modified Almon lag (in Theory and Methods).” Journal of the American Statistical Association, 72(358):442-443.CrossRefGoogle Scholar
  36. Schmidt, P. and Sickles, R. (1975), “On the efficiency of the Almon lag technique.” International Economic Review, 16(3):792-795.CrossRefGoogle Scholar
  37. Stoker, T. (1986), “Simple tests of distributional effects on macroeconomic equations.” Journal of Political Economy, 94(4):763-795.CrossRefGoogle Scholar
  38. Taylor, A. M. (1995), “Debt, dependence and the demographic transition: Latin America into the next century.” World Development, 23(5):869-879.CrossRefGoogle Scholar
  39. Taylor, A. M. and Williamson, J. G. (1994), “Capital flows to the new world as an intergenerational transfer.” The Journal of Political Economy, 102(2):348-371.CrossRefGoogle Scholar
  40. Terasvita, T. (1976), “A note on bias in the Almon distributed lag estimator.” Econometrica, 44(6):1317-1321.CrossRefGoogle Scholar
  41. Tobin, J. (1967), “Life cycle saving and balanced growth.” In: Ten Economics Studies in the Tradition of Irving Fisher, W. Fellner, et al. eds. Wiley and Sons: New York.Google Scholar
  42. Weil, D. N. (1994), “The saving of the elderly in micro and macro data.” The Quarterly Journal of Economics, 109(1):55-81.CrossRefGoogle Scholar
  43. Welch, F. (1979), “Effects of cohort size on earnings: The baby boom babies’ financial bust.” Journal of Political Economy, 87(5, pt. 2):S65-S97.CrossRefGoogle Scholar

Copyright information

© Springer 2007

Authors and Affiliations

  • Diane J. Macunovich
    • 1
  1. 1.Department of EconomicsUniversity of Redlands

Personalised recommendations