Demographic Maturity and Economic Performance: The Effect of Demographic Transitions on Per Capita GDP Growth
AbstractThis paper estimates the response of per capita GDP growth to changes in the proportion of mature workers across countries. We define and estimate the effect of demographic maturity in two ways. First, a growing cohort of working age persons (15-64) is found to have a large positive effect on growth of GDP per capita. Second, an increase in the number of prime age workers (35-54) as a fraction of the total working age population (15-64) is found to have a positive but diminishing effect on per capita GDP growth. We find that growth peaks when the ratio of prime age workers over the potentially active population reaches 0.36. Beyond this ratio, diminishing returns set in. Several well known theoretical models of economic growth and labour market performance are consistent with these findings. In particular, the standard life-cycle framework, "Mincerian" earnings equations and personnel economic models of optimal mixes of youth and mature human capital all find confirmation in these estimates.
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Bibliographic InfoPaper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0318.
Length: 52 pages
Date of creation: Dec 2003
Date of revision:
growth; demography; age structure;
Find related papers by JEL classification:
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
- 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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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Chile's Economy - Steady as She Goes
by CV in alpha.sources.cv on 2010-07-15 15:40:28
- Chile's Economy - Steady as she Goes
by CV in global economy matters on 2010-07-17 10:14:00
- Chileâ??s Economy â?? Steady as She Goes
by Claus Vistesen in credit writedowns on 2010-07-15 18:45:00
- Adela Luque, 2005. "Skill mix and technology in Spain: evidence from firm level data," Banco de Espaï¿½a Working Papers 0513, Banco de Espa�a.
- Rafael Gómez & Pablo Hernández de Cos, 2006. "The importance of being mature: the effect of demographic maturation on global per-capita income," Banco de Espaï¿½a Occasional Papers 0604, Banco de Espa�a.
- Malmberg, Bo & Lindh, Thomas & Halvarsson, Max, 2005. "Productivity consequences of workforce ageing - Stagnation or a Horndal effect?," Arbetsrapport 2005:17, Institute for Futures Studies.
- 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, vol. 21(3), pages 589-608, July.
- Gómez, Rafael & Hernández de Cos, Pablo, 2006. "The importance of being mature: the effect of demographic maturation on global per-capita GDP," Working Paper Series 0670, European Central Bank.
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