Working Paper: CEPR ID: DP18400
Authors: Rainer Kotschy; David Bloom
Abstract: This paper examines the extent to which changes in working-age shares associated with population aging might slow economic growth in upcoming years. We first analyze the economiceffects of changing working-age shares in a standard empirical growth model using country panel data from 1950–2015. We then juxtapose the estimates with predicted shifts in population age structure to project economic growth in 2020–2050. Our results indicate that population aging will slow economic growth throughout much of the world. Expansions of labor supplydue to improvements in functional capacity among older people can cushion much of this demographic drag.
Keywords: Population; Health; Life Expectancy; Prospective Aging; Labor Supply; Economic Development
JEL Codes: J11; O11; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improvements in functional capacity among older adults (I14) | Mitigation of slowdown in economic growth due to population aging (J19) |
| Working-age share (J19) | Income per capita (D31) |
| Working-age share (t-1) (J19) | Income per capita (t) (D31) |
| Population aging (J11) | Economic growth (O00) |