Demographic Dividend, Human Capital, and Saving: Take It Now or Enjoy It Later?

Andrew Mason, University of Hawaii at Manoa
Ronald Lee, University of California, Berkeley

The goal of this paper is to improve our understanding of the economic implications of the demographic dividend arising through decisions about the allocation of resources between current material needs, enhanced human capital spending, and higher rates of saving and investment. The analysis will make use of National Transfer Account (NTA) data, including time series data, and the conceptual framework that governs the construction of NTA. The simulation model that is being developed will provide a comprehensive and consistent treatment of how changes in population age structure influence public and private intergenerational transfers, non-human capital current consumption, spending on human capital, and saving. A particularly innovative feature of this work will be the treatment of private intergenerational transfers incorporating the familial linkages across age groups.