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Skills, population aging, and the pattern of international trade
Author(s) -
Gu Ke,
Stoyanov Andrey
Publication year - 2019
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12386
Subject(s) - comparative advantage , adaptability , population ageing , economics , panel data , population , test (biology) , cognitive skill , demographic economics , labour economics , cognition , psychology , international trade , econometrics , biology , demography , sociology , paleontology , management , neuroscience
Some cognitive functions, such as the ability to update skills and adapt to changes in working conditions, are known to vary with age. With population aging it becomes increasingly difficult for firms to find workers with up‐to‐date skills. As a result, countries with aging populations start losing comparative advantage in industries that rely heavily on those skills. We test this hypothesis and find robust evidence for a significant negative effect of population aging on comparative advantage of a country in industries that are intensive in skill adaptability of labor force, in both the cross‐sectional and the dynamic panel data sets.