Research on interdisciplinary topics

IRES has team members working at the intersection between economics and other fields of study.

 


Three IRES projects are situated at the borders of economics and demography. They use economic theory and economic statistics to quantify and explain demographic behaviors. Three others relate to intergenerational issues. 

Research on interdisciplinary topics is organized around these two main areas: 

 

The faculty members involved are Raouf Boucekkine, David de la Croix, Frédéric Docquier and Vincent Vandenberghe. The team includes young researchers and collaborators from other universities 

David De la Croix


Ten recent selected publications: 

  • Beine, M., F. Docquier, H. Rapoport (2007),” Measuring international skilled migration: new estimates controlling for age of entry”, World Bank Economic Review, 21, 249-254. 
  • Boucekkine, R., D. de la Croix and D. Peeters (2007), “Early literacy achievements, population density and the transition to modern growth”, Journal of the European Economic Association, 5, 183-226. 
  • Boucekkine, R., D. de la Croix and D. Peeters (2008), “Disentangling the Demographic Determinants of the English Take-off: 1530-1860”, Population and Development Review, Supplement, 126-148. 
  • Azomahou, Th., R. Boucekkine, B. Diene (2009), “A closer look at the relationship between life expectancy and economic growth”, International Journal of Economic Theory, 5, 201-244. 
  • Bouzahzah, M., D. de la Croix  and F. Docquier (2002), “Policy reforms and growth in computable OLG economies”, Journal of Economic Dynamics and Control, 26, 2093-2113. 
  • de la Croix, D. and D. Dottori (2008), “Easter Island Collapse: a Tale of Population Race”, Journal of Economic Growth, 13, 27-55. 
  • Docquier, F., B.L. Lowell and A. Marfouk (2009), “A gendered assessment of highly skilled emigration”, Population and Development Review, 35 (2), 297-322. 
  • Docquier, F. and A. Marfouk (2006), “International migration by educational attainment (1990-2000)”, in: C. Ozden and M. Schiff (eds). International Migration, Remittances and Development, Palgrave Macmillan: New York. 
  • Robin, S. and V. Vandenberghe (2004), “Evaluating the effectiveness of private education across countries: a comparison of methods, Labour Economics, 11, 487-506. 
  • Vandenberghe, V. and F. Watenberg (2007), “What does it take to achieve Equality of Opportunity? An Empirical Evaluation Based on Brazilian Data”, Economics of Education Review, 26, 710-724. 

Economic demography                                                                                                            

The first project in economic demography is on the relationships between population growth and economic growth. Such (non linear) relationships are highly interesting for many reasons. An obvious nexus between economic and demographic growth is human-capital accumulation since human capital is embodied in individuals. Most existing studies explore this nexus in an OLG (overlapping generations) setting, with population growth endogenized via the well-known quality/quantity trade-off. In this project, we take a different approach. Like most demographers, we do not take fertility as endogenous through the elementary mechanisms used in the economic literature: we return to the traditional growth models with exogenous fertility. In the one-sector framework, the impact of population growth on human capital and growth is admittedly trivial. However, in a two-sector framework à la Lucas-Uzawa, the question is extremely difficult to address due to some technical reasons inherent to endogenous growth and transitional dynamic properties. This project is devoted to solving the problem using some recent advances in the analytical approach to two-sector growth models. It is led by Raouf Boucekkine and involves three researchers, Ramon Ruiz-Tamarit, Blanca Martinez, Alberto Bucci.

Another project relates to fertility choices and population policy. In all species, when available resources are more abundant, reproduction increases. This was also true for humans before the industrial revolution, but has changed more recently. During the last two centuries, as countries grew richer, people had fewer children. This phenomenon is known as the demographic transition. Now, both within and across countries, the rich and the educated have fewer children than the poor and the unskilled.  Economists believe that fertility patterns are closely linked to economic variables; they cannot simply result from the presence or absence of contraception. They insist that parents must have reasons for the number of children they have. One school of thought models children as a way to save resources for the future and to obtain some support when old. This is the old-age support hypothesis. A second hypothesis studies the interplay between fertility and child mortality, stressing that lower mortality reduces the need for high fertility in order for the same number of children to reach adulthood. A third model emphasizes that parents face a trade-off between having many children and spending large amounts on the health and education of each of them. This approach is particularly successful in explaining fertility differences as a function of social class. Educated parents, for whom time is highly valuable on the labor market, will optimally choose to have fewer children but spend more resources on their education and health. These models yield predictions on how the size and the composition of population will change in the future through their interaction with the economic and natural environments. Population dynamics are key to the development of poor countries and the future of the world. In this project we develop further the models explaining fertility as an optimal behavior and we address the related policy issues. The project is conducted by David de la Croix in collaboration with Matthias Doepke (Northwestern University) and Axel Gosseries (ETES). It also involves Davide Dottori.


The third project in economic demography aims to quantify the size of the brain drain. Due to the lack of harmonized data, the literature on the consequences of high-skill emigration has long remained theoretical. In partnership with the World Bank, our team has been working intensively since 2005 on the construction of a new database on international migration by education level. The construction involves three steps: (i) collecting census and register information on the structure of immigration in all OECD countries, (ii) summing over source countries to evaluate the stock of emigrants from any given sending country to the OECD area by education level, and iii) comparing the educational structure of emigration to that of the population remaining at home. This gives emigration rates by educational attainment in 1990 and 2000. This year, we have published an update of the data set including the gender breakdown. We are now extending it to account for migration to non-OECD countries; the inclusion of non-OECD host countries (such as the Gulf states, South Africa, Singapore and Ivory Coast) has a major impact on figures for the brain drain from neighboring countries. Finally, we are preparing an original database on the emigration of healthcare professionals. These databases are publicly available and are used by many scholars worldwide. This project is conducted by Frédéric Docquier, in collaboration with Abdeslam Marfouk (IWEPS).

Intergenerational issues                                                                                                        

In this area, our first objective is to model conflicts and solidarity across generations in aging societies. This issue is at the center of economic policy debates today. Reducing public debt, financing social security, taxing capital and labor, and designing the education system all imply substantial intergenerational transfers. The tool that economists use to analyze these issues is the overlapping generations model, which allows the different periods of life to be captured: youth, adulthood and old age. When the model includes capital accumulation, it also allows researchers to formalize the development of an economy, relating its growth path to the savings behavior of young agents. The aim of this project is to carry out an in-depth analysis of this model and to draw its major policy implications. This project is conducted by David de la Croix, in collaboration with Grégory Ponthière.

A second objective is to obtain a quantitative evaluation of the implications of population aging for the sustainability of existing public pension schemes. We set up an OLG model with fifteen generations. Life duration is stochastic. A member of a given generation may live for up to fifteen five-year periods. We thus have a model with up to fifteen age groups, going from 25-30 to 95-100. Labor market frictions are factored in using a Mortensen-Pissarides framework with exogenous job destruction. The labor market is not segmented and all unemployed people compete for the available vacancies. The legal (and compulsory) retirement age is 65. Early retirement is however possible between 50 and 65, and is endogenous. In this setup we examine the consequences of increased life expectancy and of changes in early-retirement rates. The project is directed by Henri Sneessens and David de la Croix, and the researchers involved are Olivier Pierrard, Anna Batyra, Ferre De Graeve, Maarten Dossche, Marina Emiris.

Our final project aims to quantify the effect of aging on labor productivity. The Belgian population is aging due to demographic changes, and so is the workforce of firms active in Belgium. This trend is likely to remain for the foreseeable future. It will be reinforced by the willingness of public authorities to expand employment among individuals aged 50+. Aging, and policies aimed at maintaining older individuals in employment, raise crucial issues. One of them is the effect on the productivity of firms, and (by extension) on the whole economy. The central aim of this project is to quantify the effect of the changing age structure of the workforce on the productivity and profitability of firms. Our intention is to tap into a unique employer-employee panel data set, and apply econometric techniques to producing robust evidence on the causal effect of aging on productivity, while attempting to identify the contextual or policy factors that affect this relationship. The project is led by Vincent Vandenberghe and involves Fabio Waltenberg and Andrea Ariu.

 

| 7/09/2011 |