Conceptual and Methodological Advances
- Elgar original reference
Edited by Henk A. Becker and Frank Vanclay
Chapter 12: Socioeconomic Modelling for Estimating Intergenerational Impacts
12 Socioeconomic modelling for estimating intergenerational impacts Gijs Dekkers Introduction The use of empirical models to evaluate potential economic, ﬁscal or social policy is widely accepted. The best known models of this type are macroeconomic models, which simulate the eﬀect of intended policy measures (including changes to existing policy) or possible exogenous changes (such as a change in the price of oil) on aggregated variables such as gross domestic product (GDP), inﬂation, the budget deﬁcit, external debt, tax beneﬁts or social security payments. The eﬀects of potential policy changes are expressed in terms of how they change the aggregate variables over time. For example, a decision by the Minister for Social Aﬀairs to increase the minimum pension beneﬁt, with the intention of decreasing poverty among retirees, will result in an increase in pension expenditure by government. Macroeconomic models are also often used in the ﬁeld of social policy. For example, government agencies in almost every developed country have models that evaluate the eﬀects of demographic changes (notably aging), in combination with social and ﬁscal policy, on the ﬁnancial viability of the social security scheme and speciﬁcally the pension scheme. This long-term ﬁnancial viability of a scheme is often referred to as its ‘sustainability’ (that is, ﬁnancial sustainability) and is deﬁned in terms of the (dis)equilibrium of future costs and revenues. If the ﬁnancial sustainability of a scheme was considered, the cost-increasing eﬀect of linking the average pension bene...
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