Demographic Changes and Regional Economy: Simulation Results From the Chicago CGE Model

This paper analyzes the impact of demographic changes on a regional economy, a process whose impact will become more important over the next a few decades. Specifically, this study quantifies the effect of an aging population and retirement migration focusing on Chicago regional economy in terms of its impact on economic growth, income (asset) distribution, and welfare. For this purpose, this paper uses a two-region computable general equilibrium (CGE) model, combined with an overlapping generations (OLG) framework. The first finding is that the aging population has significant negative impacts on Chicago economy, which are quite similar to the results found in the previous studies at the national level. However, the policy responses yield the quite different effects on Chicago economy compared to rest of the U.S. In particular, more local immigrants than national average only increases the income disparity without increasing benefit. This study also suggests that, under aging population, the larger immigrants and more generous pension benefit do not necessarily result in more desirable results, while an increase in retirement age turns out to monotonically improve the average welfare. In addition, the ongoing retirement out-migration of Chicago region hurts the local economy, which becomes stronger under aging population, while rest of the U.S. benefit from this flow.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Park, Seryoung

Contributors dc:contributor

• Hewings, Geoffrey J.D.

• Gerontology

Language dc:language

eng

Identifier

(MiAaPQ)AAI3269999

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/85581