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The importance of being mature: the effect of demographic maturation on global per capita GDP

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  • Rafael Gómez
  • Pablo Hernández de Cos

Abstract

Given that savings behaviour and worker productivity have strong life-cycle components and given that demographic profiles vary across countries, population age structure should be linked to differences in levels of economic development. In this paper we measure the economic importance of age structure variation for the global economy. We find that even after adjusting for country-specific effects, demographic maturation has been associated with nearly half of the evolution of global per-capita GDP since 1960. We also find that age structure differences can account for just over half of the variation in worldwide per capita GDP (i.e. the lack of sigma convergence) observed since 1960. Taken as a whole, these results complement recent theoretical and empirical work on the importance of population size and economic development and reinforce empirical work linking mature demographic age structures with faster cross-country economic growth rates. JEL Classification: J13, J22, J24, O11, O40
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  • Rafael Gómez & Pablo Hernández de Cos, 2008. "The importance of being mature: the effect of demographic maturation on global per capita GDP," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 589-608, July.
    • Handle: RePEc:spr:jopoec:v:21:y:2008:i:3:p:589-608
    DOI: 10.1007/s00148-006-0107-6
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    2. Lokshin,Michael M. & Ravallion,Martin & Torre,Ivan, 2022. "Is Social Protection a Luxury Good ?," Policy Research Working Paper Series 10174, The World Bank.
    3. Michael Lokshin & Martin Ravallion & Iván Torre, 2023. "The Social Protection Engel Curve," The World Bank Economic Review, World Bank, vol. 37(4), pages 519-548.
    4. Birgit Aigner-Walder & Thomas Döring, 2012. "The Effects of Population Ageing on Private Consumption — A Simulation for Austria Based on Household Data up to 2050," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 2(1), pages 63-80, June.
    5. Georgiana Cristina TOMA (ROSU) & Gabriela TUCHILUS, 2018. "What Are The Effects Of Active Ageing On Gdp Per Capita?," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(1), pages 611-619, November.
    6. M. Mazharul Islam, 2016. "Demographic transition and the emerging windows of opportunities and challenges in Bangladesh," Journal of Population Research, Springer, vol. 33(3), pages 283-305, September.
    7. Fong Joelle H., 2017. "Extending Demographic Windows of Opportunity: Evidence from Asia," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 11(1), pages 1-23, January.
    8. Daniel Liviano & Josep-Maria Arauzo-Carod, 2012. "Spatial Exploration of Age Distribution in Catalan Municipalities," ERSA conference papers ersa12p81, European Regional Science Association.
    9. Mr. Erik Lueth, 2008. "Capital Flows and Demographics—An Asian Perspective," IMF Working Papers 2008/008, International Monetary Fund.
    10. Vistesen, Claus, 2009. "Ageing and Export Dependency," MPRA Paper 17655, University Library of Munich, Germany.
    11. Jinqi Ye & Ziyan Chen & Bin Peng, 2021. "Is the demographic dividend diminishing in China? Evidence from population aging and economic growth during 1990–2015," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2255-2274, November.
    12. M. Narayana, 2015. "India’s Age Structure Transition, Sectoral Labor Productivities, and Economic Growth: Evidence and Implications Based on National Transfer Accounts," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 34(3), pages 381-415, June.
    13. Zhang, Haifeng & Zhang, Hongliang & Zhang, Junsen, 2015. "Demographic age structure and economic development: Evidence from Chinese provinces," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 170-185.
    14. Gindra Kasnauskiene & Karol Michnevic, 2017. "Contribution of increased life expectancy to economic growth: evidence from CEE countries," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 6(2), pages 82-99, November.

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    More about this item

    Keywords

    Age structure; Life-cycle model; Cross-country growth; J13; J24; O40;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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