Population development and the public sector economy in Finland

Väestöliitto has newly published a book dealing with the effects of current population trends on society and the life of the common people. The aim of Väestöliitto is to use this book to begin a discussion on population questions and to direct attention to the necessity for planning authorities and decision makers to take demographic aspects into consideration in their work. The book discusses the effects of population aging on the public economy, education, industry and commerce as well as on the economy of the municipalities. We are here reproducing an article concerning the effects of population aging on the public economy and social expenditures. In economic theory population trends are considered exogenous, or factors outside the economic models. The authors, both economists, examine the link between population development and economy, mainly the public economy. They also discuss possible ways to avoid unwanted economic development caused by population aging. We feel the article might also interest readers outside the Finnish borders.