Population Aging and Economic Growth – David E. Bloom & David Canning & Günther Fink
Population Aging and Economic Growth – David E. Bloom & David Canning & Günther Fink
Contents:
About the Series.
Acknowledgments.
Abstract.
I. Introduction.
II. Population Aging: Facts, Force, and Future.
III. The Economic Impacts of Population Aging.
IV. Summary and Discussion.
References.
Abstract
Between 2000 and 2050, the share of the population aged 60 and over is projected
to increase in every country in the world; the same is true for the 80+ population
in all but one country (Mali). Worldwide, the largest absolute increases are yet to
come.
Although labor force participation rates are projected to decline from 2000 to
2040 in most countries, due mainly to changes in their age distributions, laborforce-
to-population ratios will actually increase in most countries. This is because
low fertility will cause lower youth dependency that is more than enough to
offset the skewing of adults toward the older ages at which labor force
participation is lower. The increase in labor-force-to-population ratios will be
further magnified by increases in age-specific rates of female labor force
participation associated with fertility declines. These factors suggest that
economic growth will continue apace, notwithstanding the phenomenon of
population aging.
For the OECD countries, the declines projected to occur in both labor force
participation and labor-force-to-population ratios suggest modest declines in the
pace of economic growth. But even these effects can be mitigated by behavioral
responses to population aging—in the form of higher savings for retirement,
greater labor force participation, and increased immigration from labor-surplus
to labor-deficit countries. Countries that can facilitate such changes may be able
to limit the adverse consequences of population aging. When seen through the
lens of several mitigating considerations, there is reason to think that population
aging in developed countries may have less effect than some have predicted. In
addition, policy responses related to retirement incentives, pension funding
methods, investments in health care of the elderly, and immigration can further
ameliorate the effect of population aging on economic growth.