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DOES POPULATION AGEING PROMOTE FASTER ECONOMIC GROWTH?
Author(s) -
Gómez Rafael,
De Cos Pablo Hernández
Publication year - 2008
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2008.00279.x
Subject(s) - per capita , economics , population ageing , demographic economics , population , ageing , gross domestic product , demographic change , demography , population growth , economic growth , medicine , sociology
Can divergent demographic trends account for differences in per capita output across countries? We address this question by offering evidence that the process of population ageing is positively and significantly related to cross‐country economic performance. We define and estimate the effect of demographic change in two ways. First, a growing cohort of working age persons (15–64) as a share of the total population is found to have a large positive effect on GDP per capita . Second, an increase in the number of prime age persons (35–54) relative to the younger working age population (15–34) is found to have a positive but curvilinear effect with respect to per capita GDP. We find that changes in per capita GDP peak when the ratio of the prime‐to‐younger age population reaches an optimum of prime age workers for every younger aged worker. Beyond or below this optimal ratio, per capita output is lowered.