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Household structures are changing throughout Nordic and other developed countries. These changes – couples postponing childbearing, increasing shares of divorced and other single mothers and fathers, more people in old age living alone – will have important implications for the sustainability of the Nordic welfare model, whose essential features are related to households and families. These include large transfers to households, publicly provided health and long-term care services, large public spending on child care and education, and extensive female participation in labour markets.
The shifts in family positions are concurrent and intertwined with other demographic changes. Increasing longevity, e.g., makes it more and more important whether people in old ages live alone or not. It is thus important to study family and household developments and other demographic changes together.
Our aim is to amend the analysis of population aging and its economic consequences with the analysis of changing household structures and their economic consequences. Recent studies have shown that estimates concerning the economic consequences of population aging are highly uncertain. These studies have built on quantitative research concerning the errors in population projections. Household aspects will add new dimensions to these uncertainty studies. It is important to evaluate the consequences of these new quantified uncertainties on the projections concerning the economic outcomes with aging populations.
The main novelty is that the project combines statistical analysis of household types with economic analysis of population aging. Probabilistic household projections, which describe the developments of different household types and quantify the uncertainty in these descriptions, will be used jointly with computable general equilibrium models and partial models describing household behaviour under uncertainty.
This research project is carried out by a Nordic consortium during years 2009-2012. The participants from ETLA are Eija Kauppi, Jukka Lassila, Niku Määttänen and Tarmo Valkonen. Other partners are University of Eastern Finland (Juha Alho), Copenhagen Business School (Svend E. Hougaard Jensen), CEBR (Rasmus Jacobsen) and University of Oslo (Nico Keilman and Solveig Christiansen).
