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The policy impacts of the demographic transition



Padula M.


Sinopoli G.



The aim of the research project is to improve our understanding of the economic consequences of demographic ageing for individuals' well-being. The project will produce frontier research on the implications of population ageing, on the well being of older persons, and on how individual decisions are affected by the economic incentives offered by government policies and programmes. The project is motivated by the demographic trends currently faced by several developed countries, where we observe a sharp increase in survival probability at all ages and a rising share of the elderly in total population. Amongst other important policy issues, these trends are particularly relevant for the sustainability of social protection schemes and for potential reforms to such schemes. Understanding the determinants of retirement, the nature of saving for retirement, and how economic circumstances interact with health outcomes are perhaps the most critical issues that demographic trends have forced upon us. Appropriate modelling of these issues needs to recognise that individuals and households take intertemporal decisions in order to provide resources for their old age. Understanding the nature of these decisions, and the way in which they are affected by changes in household circumstances, both currently and potentially in the future, is therefore an important component of policy analysis in this area. The project will look at the individual choices and at how such choices respond to policy reforms. Moreover, the project will provide structural models of individual choices. Such models allow to evaluate policy reforms on an ex-ante basis and provide the grounds to contrast what individuals actually do with what individuals would be expected to do under alternative scenarios implied by economic theory. This will naturally lead to investigate the possible causes of the discrepancies between models and data. Finally, the project will recognise the potential effects of cognitive impairments and lack of financial literacy on saving behaviour.

Additional information

Start date
End date
36 Months
Funding sources
Swiss National Science Foundation / Project Funding / Humanities and social sciences (Division I)