stochastic population forecast and pension Demand in Italy

Abstract

This paper presents the Stochastic Population Forecast for the Italian population and its pension fund demand until 2064 (50 years from now). Using the demographic components of population (Mortality, Fertility and Migration) to model the population of Italy. We use the Lee-Carter model to forecast and model both Mortality and Fertility data obtained from the various Human mortality and fertility database. We estimate the Total Fertility Rate (TFR) of the female population and also the Age-Specific Fertility rate (ASFR) which shows the mean age of a giving population to give birth at the forecasted period. The Migration data was generated and the divided into subgroups emigration and immigration which also has two categories (male and female) in order to know which group has the highest turn out and the mean migration age as well. We forecast the net migration and also show the forecasted sex ratio of migration. The cohort component (Leslie Matrix) was used to combine all the demographic component in order to plot the population pyramid of the given country for both male and female. The old age dependence ratio is considered as the main determinant of pension demand and also the amount of expenses on pensions was forecasted and for the same period.