MENA region is undergoing rapid demographic transition, where 50% of the population is under the age 25 and high youth unemployment rates are argued to be one of the main sources of political instability. Fighting youth exclusion from work is one of the main challenges in the region. In this paper we evaluate the economic impact of the demographic transition for selected countries which experience different speeds of transition, namely: Iran, Morocco and Egypt. The impact of demographic shift on the evolution of human capital stock and physical capital stock, has been highlighted by the literature. Since financial markets play a crucial role to allocate capital and channel the funds to the productive sector, it is hence fundamental to take into account the role of the financial markets in the growth process associated with demographic change. We have developed a general equilibrium overlapping generations model with a cost for capital mobilisation as a proxy for financial markets' efficiency. We have found that the demographic shift will be an important driver for growth in the upcoming decades. Furthermore, our results show that a more efficient financial sector leads to better economic performance. Specifically, youth are the primary beneficiaries: an increase in the financial sector efficiency can reduce up to 8 percentage points of the youngest age group unemployment.
We use the National Transfer Accounts methodology to calculate private asset income by age for the years 1979-2011. We analyze age profiles using three indicators of intergenerational equity. Monetary asset income shows no evidence of generational breaks to the benefit of the baby-boom generation. On the contrary, baby-boomers suffered from the high interest rates that they paid to become homeowners. Imputed rents show an obvious breakdown of intergenerational equity when we use an inter-age and intergenerational indicator. This indicator compares the per capita asset income at a given age with the average asset income of people aged 18-85. It gives the relative situation of one age group compared to its contemporaries and it also gives the relative situation of one generation when we compare birth cohorts over time. We find that the cohort born in 1950 benefited from a better position than their successors. Moreover, the cohorts born before the war and during the war appear to be even more favored than the baby-boomers. The cohorts born in 1930 and in 1940 have a better situation than the previous generations and a better position than the following generations.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.