Heikki Tikanmäki - Higher education compensating for low fertility – A microsimulation approach

  • Presenting author: Heikki Tikanmäki (Finnish Centre for Pensions)

  • Authors: Heikki Tikanmäki, Julia Hellstrand, Mikko Myrskylä, Jessica Nisén and Ziwei Rao

  • Session: A02A - Dynamic / Long term [1] - Monday 16:30-18:00 - Ceremonial Hall

  • Slides: PDF

The total fertility rate in Finland has declined from 1.87 in 2010 to 1.32 in 2022. We analyze to what extent investing in higher education could compensate for the decline in the working-age population. We model various educational scenarios with the ELSI pension microsimulation model. The analysis includes time dynamics but is static with respect to behavioral responses. The results include the development of the wage sum and GDP in different scenarios as well as various measures on the sustainability of the pension system. The ELSI model is used in producing official pension projections in Finland. It covers the statutory pension system of Finland. The model is based on individual-level data with up to a 100% sample of the Finnish adult population.