Forecasting the old-age dependency ratio to determine a sustainable pension age

24 February 2022

Presentation given to ARLES (Ageing Risks and their Long-term impact on the Economy and Society)

I’ll describe how to forecast the old-age dependency ratio for Australia under various pension age proposals, and estimate a pension age scheme that will provide a stable old-age dependency ratio at a specified level. The approach involves a stochastic population forecasting method based on coherent functional data models for mortality, fertility and net migration, which is used to simulate the future age-structure of the population. The results suggest that the Australian pension age should be increased to 68 by 2030, 69 by 2036, and 70 by 2050, in order to maintain the old-age dependency ratio at 23%, just above the 2018 level. The general approach described can easily be extended to other target levels of the old-age dependency ratio and to other countries.

 Download pdf

Github repo for slides

« Feature-based time series analysis | Developing good research habits »