Ageing and Productivity Growth: Are there Macro-level Cohort Effects of Human Capital?
AbstractSlower growth of the labour force and an increase in old-age dependency will reduce the growth of aggregate output and output per capita in many developed countries. However, a major question is whether there is any systematic link between demographics and the productivity of those who will still be active during the up-coming period of demographic ageing. As productivity is difficult to investigate at a micro level, the paper builds on a large macro-data panel covering developed as well as developing countries and explores the impact of the age composition of the labour force on levels and growth rates of output per worker as well as on total factor productivity (TFP). The results confirm earlier findings by Feyrer (2007), pointing to an inversely U-shaped relationship between the share of workers in different age groups and productivity which mainly works through the TFP channel and is effectively much stronger than what can be observed at a micro level. In-depths analyses suggest that cohort effects in human-capital accumulation may contribute to this pattern, but do not explain it. The paper concludes with simulations for a number of OECD countries showing that the impact of projected ageing of the labour force on productivity and per-capita growth could be really substantial in some cases.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2207.
Date of creation: 2008
Date of revision:
demographic change; economic growth; total factor productivity; macro-level panel regressions; simulations;
Find related papers by JEL classification:
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
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