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

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Author Info
Rafael Gómez () (London School of Economics)
Pablo Hernández de Cos () (Banco de España)
Abstract

Given that savings and productivity follow a hump shaped profile with respect to age and given that demographic profiles vary across countries, population age structure may be linked to differences in levels of economic development. In this paper we measure the importance of age structure in accounting for differences in per capita income levels and the dispersion of those income levels across countries. We find that even after adjusting for country-specific effects, age structure variation can account for a large portion of differences in per capita income and the lack of sigma convergence observed in cross country data. For the global economy as a whole, we find that demographic maturation has had a strong and positive effect on the evolution of global per capita income since 1960.

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File URL: http://www.bde.es/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosOcasionales/06/Fic/do0604e.pdf
File Format: application/pdf
File Function: First version, June 2006
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Publisher Info
Paper provided by Banco de España in its series Banco de España Occasional Papers with number 0604.

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Length: 31 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:bde:opaper:0604

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Related research
Keywords: age structure; life cycle savings model; cross-country growth;

Find related papers by JEL classification:
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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