Working Paper: NBER ID: w16705
Authors: David E. Bloom; David Canning; Gnther Fink
Abstract: The share of the population aged 60 and over is projected to increase in nearly every country in the world during 2005-2050. Population ageing will tend to lower both labor-force participation and savings rates, thereby raising concerns about a future slowing of economic growth. Our calculations suggest that OECD countries are likely to see modest - but not catastrophic - declines in the rate of economic growth. However, behavioral responses (including greater female labor force participation) and policy reforms (including an increase in the legal age of retirement) can mitigate the economic consequences of an older population. In most non-OECD countries, declining fertility rates will cause labor-force-to-population ratios to rise as the shrinking share of young people will more than offset the skewing of adults toward the older ages. These factors suggest that population ageing will not significantly impede the pace of economic growth in developing countries.
Keywords: No keywords provided
JEL Codes: J14; J15; J21; J26; O1; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in the share of the elderly population (J14) | lower labor force participation (J49) |
| increase in the share of the elderly population (J14) | lower savings rates (D14) |
| lower labor force participation and lower savings rates (J49) | decline in economic growth (O49) |
| greater female labor force participation and policy reforms (J21) | mitigate adverse economic impacts of aging population (J14) |
| behavioral responses (D91) | counterbalance negative effects of a shrinking working-age population (J11) |
| declining fertility rates (J13) | rise in labor force-to-population ratios in developing countries (J89) |