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| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Implications of Demographic Changes on Stock Markets |
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| Institution | University of Zurich |
| Faculty | Faculty of Economics, Business Administration and Information Technology |
| Number of Pages | 46 |
| Date | 2015 |
| Abstract Text | This thesis examines and compares the effects of demographic changes with regard to the age structure on the stock markets in Switzerland, Japan and the United States. Comparison of these markets is interesting due to different progression and current states in population aging. Obtained results indicate significance of age structure for stock returns, equity risk premium, and PE ratio although models exhibit very low explanatory power and significance is mainly found for the United States and only partially for Switzerland and Japan. The results suggest significance mainly for changes in middleage cohort, defined as population aged 40-49 and 40-64. Significance is often obtained if middle-age population is relatively compared to the elderly population, aged 65 years and older. Increases in middleage population have positive effects on stock returns, equity risk premium and on PE ratio while increases in elderly population have negative impact on these three measures. According to the preserved results an increase in retirement age would lead to an increase in stock market returns and PE ratio while equity risk premiums would decrease. Although projections for implications of demographic changes are very delicate, PE ratio forecast is performed based on the obtained outcome of this thesis. The projection results suggest that no severe drop due to population aging is expected. Conclusion is that existence of implication of demographic changes on stock markets is probable but further investigation is required regarding the power of the effects. |
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