Probabilistic Population Projections Using Monte Carlo Methods : Spain, 2016-2066

In this paper we implement a methodology that generates population projections combining the cohort-component method with Monte Carlo simulation of its main inputs: fertility rates by age, survival probabilities by age and gender and immigration flows by age and gender. The Monte Carlo simulation is based on a parsimonious parameterization of the corresponding curves and a multivariate time series model (Vector of Autoregressions, VAR) used to simulate future scenarios. The model considers separately the dynamics of the national and foreign population, allowing for a detailed analysis of the migration phenomenon. The paper includes a detailed case study based on the Spanish population projections for the period 2016-2066. Both our deterministic and stochastic demographic projections are fully replicable as the methodology, coded in MATLAB and Visual Basic, is freely accessible and all the assumptions are made explicit. The methodology is coded in MATLAB and Visual Basic, making explicit and replicable all the data and assumptions used to generate the population projections, deterministic as well as stochastic. The paper includes a detailed case study based on the Spanish population projections, 2016-2065