TY - JOUR
T1 - Life-cycle income hypothesis and demographic structure
T2 - A semi-nonparametric analysis using a panel of countries
AU - Park, Cheolbeom
AU - Yu, Jina
PY - 2013/3
Y1 - 2013/3
N2 - In this paper, we attempt to determine whether the life-cycle income (LCI) hypothesis can explain movements in the national savings rate using the panel data of countries and the semi-nonparametric approach. While relating movements in the population density function to movements in the national savings rate, we are able to estimate the age response function with a high level of precision, and the estimated age response function is hump-shaped, which is generally consistent with the prediction from the LCI hypothesis. Running time-series regressions separately for individual countries, we also demonstrate that the estimated age response functions are consistent with the LCI hypothesis in a large proportion of countries, despite limited observations in a variety of countries. Finally, our time-series and cross-sectional analysis results imply that the LCI hypothesis is more likely to hold in a country wherein the growth rate of per capita GDP and the growth rate of population are high.
AB - In this paper, we attempt to determine whether the life-cycle income (LCI) hypothesis can explain movements in the national savings rate using the panel data of countries and the semi-nonparametric approach. While relating movements in the population density function to movements in the national savings rate, we are able to estimate the age response function with a high level of precision, and the estimated age response function is hump-shaped, which is generally consistent with the prediction from the LCI hypothesis. Running time-series regressions separately for individual countries, we also demonstrate that the estimated age response functions are consistent with the LCI hypothesis in a large proportion of countries, despite limited observations in a variety of countries. Finally, our time-series and cross-sectional analysis results imply that the LCI hypothesis is more likely to hold in a country wherein the growth rate of per capita GDP and the growth rate of population are high.
KW - Age distribution
KW - Fourier flexible form
KW - life-cycle income hypothesis
KW - semi-nonparametric regression
KW - series estimation
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U2 - 10.1142/S0217590813500033
DO - 10.1142/S0217590813500033
M3 - Article
AN - SCOPUS:84874807728
VL - 58
JO - Singapore Economic Review
JF - Singapore Economic Review
SN - 0217-5908
IS - 1
M1 - 1350003
ER -