Geoscience Reference
In-Depth Information
immigration flows to deal with labor shortage issues? Are less restrictive capital
flows more capable of overcoming the various political barriers regarding cross-
border labor flows?
Additional considerations, especially related to equity concerns, need to be
addressed. While Yoon and Hewings (
2006
) found that ageing generated a negative
impact on the Gini coefficient of income equality, Park and Hewings (
2009
) found
that when assets (i.e. non wage and salary income) were included, the impact was
reversed—although not continuously over time. However, the choices of non-wage
and salary assets was not specified. Hence, it would seem appropriate to extend the
current real-side models of the ICGE type to the real-financial side so as to measure
the effects of allocating financial assets on the economies. The agent could choose a
set of financial assets including not only simple savings with commercial banks but
also bonds and equities, depending on their own capital costs and returns. In
addition, another possible extension would be to focus more on the role of migra-
tion particularly specified by age and, for the working population, levels of human
capital endowment, that is likely to be heterogeneous by age group. Further, retiree
migrants will exert a more significant role as they shift the locus of their
expenditures from SMA to ROK in Korea or from the US Midwest to locations in
the southeast or the west.
In summarizing the demographic challenges to economic development, there are
several important conclusions that can be drawn from the nascent literature. House-
hold consumption varies by age and income level; as the composition (age structure
or income structure) of households change, there are likely to be important changes
in the type of goods and services demanded. Absent immigration and investment in
human capital—particularly in the prime working age populations—there is likely
to be a negative effect on gross product. Immigration, investment in human capital
and removal of retirement age restrictions may help offset the negative effects of
ageing populations. However, internal migration may serve to complicate the
interregional impacts. Further, the impacts of immigration on regional competitive-
ness have not been explored especially the potential for differential impacts over
time [see Park and Hewings (
2007b
)]. Finally, the financial implications—particu-
larly the fiscal stress likely to be placed on social security systems by increases
dependency ratios (number on non working age people dependent on each worker)
create considerable uncertainties for effective planning.
Better health care has also created another issue—extending the anticipated
lifetime for many retirees. Assets planned for a 10-year retirement period may
now need to stretch to 20 or 30 years; as a result, many retirees have re-attached to
the labor force. Do they reclaim prior occupations or move into other fields? Do
they remain where they have retired or re-locate, perhaps back to communities in
which they worked previously? Retiree cohorts are not homogeneous and thus there
is a need to focus on further disaggregation of those post 65 years of age. Finally,
there is the issue of the housing stock; retiree households are usually smaller in size
and thus housing demands—in terms of size and location—may be very different
from the current supply, much of which is oriented to working-age families. The
