Working Paper: NBER ID: w13221
Authors: David E. Bloom; David Canning; Guenther Fink; Jocelyn E. Finlay
Abstract: Increases in the proportion of the working age population can yield a "demographic dividend" that enhances the rate of economic growth. We estimate the parameters of an economic growth model with a cross section of countries over the period 1960 to 1980 and investigate whether the inclusion of age structure improves the model's forecasts for the period 1980 to 2000. We find that including age structure improves the forecast, although there is evidence of parameter instability between periods with an unexplained growth slowdown in the second period. We use the model to generate growth forecasts for the period 2000 to 2020.
Keywords: economic growth; age structure; demographic dividend
JEL Codes: C53; J1; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased proportions of the working-age population (J21) | economic growth (O49) |
| age structure (J11) | forecast accuracy (C53) |
| age structure influences model's predictive power (J11) | forecast accuracy (C53) |
| models without age structure (J11) | overestimate growth for the period 1980-2000 (O40) |
| age structure (J11) | more accurate forecasts (C53) |
| age structure variable (J11) | forecasting ability (C53) |
| age structure affects growth forecasts (J11) | implications for economic growth predictions (O40) |