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Does Aging Influence Sectoral Employment Shares?: Evidence from Panel Data

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  • Ulrich Thießen
  • Konstantin A. Kholodilin
  • Boriss Siliverstovs

Abstract

In this study, we investigate whether population aging influences employment shares in different economic sectors. To this end, we employ dynamic panel data analysis. Our unbalanced data set comprises 54 countries and extends to a maximum time period from 1970 till 2004. Our results suggest that the aging variable - approximated by the ratio of elderly either to the total population or to the labor force - does have a statistically significant differentiated impact on the employment shares when controlling for other relevant factors, e.g., income per capita, share of trade in GDP, government consumption share in GDP, population size, etc. In particular, we find that an increase in the aging proxies exerts a statistically significant adverse effect on the employment shares in agriculture, manufacturing, construction, and mining and quarrying industries. At the same time, increasing share of the elderly people in the society positively affects employment shares in community, social, and personal services as well as in the financial sector. In the simulation exercise, we illustrate the effects of aging on the employment structure within the next 45 years.

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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 785.

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Length: 18 p.
Date of creation: 2008
Date of revision:
Handle: RePEc:diw:diwwpp:dp785

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Keywords: Structural change; aging; employment shares; dynamic panel data;

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  1. Axel Boersch-Supan & Alexander Ludwig, 2005. "Aging, pension reform, and capital flows: A multi-country simulation model," Computing in Economics and Finance 2005, Society for Computational Economics 123, Society for Computational Economics.
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Cited by:
  1. Alfred Garloff & Carsten Pohl & Norbert Schanne, 2011. "Do smaller labour market entry cohorts really reduce German unemployment?," ERSA conference papers ersa10p658, European Regional Science Association.

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