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Global Demographic Change: Dimensions and Economic Significance

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Author Info
David E. Bloom
David Canning () (Harvard School of Public Health)

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Abstract

The last 150 years have been a period of unusual demographic change. Baby booms occurred in the aftermath of wars in some countries. In others, baby booms occurred as a result of falling infant mortality rates and subsequent reductions in fertility. Baby boom generations produce an echo, in the form of a large cohort of children a generation later, creating long-term demographic disequilibria. These destabilized age structures, together with improvements in health and longevity among the elderly, are producing, for the first time in history, populations with large and growing rates of old age dependency. We argue that transitions from high mortality and fertility to low mortality and fertility can be beneficial to economies as the large baby boom cohorts enter the workforce and save for retirement, while rising longevity has perhaps increased both the incentive to invest in education and to save for retirement. We present estimates of a model of economic growth that highlights the positive effects of demographic change during 1960-95. We also show how Ireland benefited from lower fertility in the form of higher labor supply per capita and how Taiwan benefited through increased savings rates. We emphasize, however, that the realization of the potential benefits associated with the demographic transition appears to be dependent on institutions and policies, requiring the productive employment of the potential workers and savings the transition generates.

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Paper provided by Program on the Global Demography of Aging in its series PGDA Working Papers with number 0105.

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Date of creation: 2005
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Handle: RePEc:gdm:wpaper:0105

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Keywords: demography mortality fertility baby boom

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  2. Bloom, David E & Williamson, Jeffrey G, 1998. "Demographic Transitions and Economic Miracles in Emerging Asia," World Bank Economic Review, Oxford University Press, vol. 12(3), pages 419-55, September.
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  3. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Bloom, David E. & Canning, David & Sevilla, Jaypee, 2004. "The Effect of Health on Economic Growth: A Production Function Approach," World Development, Elsevier, vol. 32(1), pages 1-13, January. [Downloadable!] (restricted)
  5. Feldstein, Martin S, 1985. "The Optimal Level of Social Security Benefits," The Quarterly Journal of Economics, MIT Press, vol. 100(2), pages 303-20, May. [Downloadable!] (restricted)
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  6. Timothy Hatton & Jeffery Williamson, 2002. "What Fundamentals Drive World Migration?," Discussion Papers 458, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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  7. Robert W. Fogel, 1994. "Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy," NBER Working Papers 4638, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-1), pages 1-118. [Downloadable!]
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  11. Kalemli-Ozcan, Sebnem & Ryder, Harl E. & Weil, David N., 2000. "Mortality decline, human capital investment, and economic growth," Journal of Development Economics, Elsevier, vol. 62(1), pages 1-23, June. [Downloadable!] (restricted)
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  14. Pritchett, Lant H. & DEC, 1994. "Desired fertility and the impact of population policies," Policy Research Working Paper Series 1273, The World Bank. [Downloadable!]
  15. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
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  16. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
  17. Ronald Lee, 2003. "The Demographic Transition: Three Centuries of Fundamental Change," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 167-190, Fall. [Downloadable!] (restricted)
  18. David E. Bloom & David Canning & Pia N. Malaney, 1999. "Demographic Change and Economic Growth in Asia," CID Working Papers 15, Center for International Development at Harvard University. [Downloadable!]
  19. Nikhil Roy & Andrew D. Foster, 1996. "The Dynamics of Education and Fertility: Evidence from a Family Planning Experiment"," Home Pages _073, University of Pennsylvania. [Downloadable!]
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  22. repec:bin:bpeajo:v:51:y:1995:i:1995-1:p:1-75 is not listed on IDEAS
  23. Deaton, A. & Paxson, C., 1998. "Growth, Demographic Structure, and National Saving in Taiwan," Papers 183, Princeton, Woodrow Wilson School - Development Studies.
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  24. David E. Bloom & David Canning & Bryan Graham, 2003. "Longevity and Life-cycle Savings," Scandinavian Journal of Economics, Blackwell Publishing, vol. 105(3), pages 319-338, 09. [Downloadable!] (restricted)
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  25. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  26. Kelley, Allen C, 1988. "Economic Consequences of Population Change in the Third World," Journal of Economic Literature, American Economic Association, vol. 26(4), pages 1685-1728, December. [Downloadable!] (restricted)
  27. Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 641-80, August. [Downloadable!] (restricted)
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  30. David E. Bloom & David Canning & Michael Moore, 2004. "The Effect of Improvements in Health and Longevity on Optimal Retirement and Saving," NBER Working Papers 10919, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Bernardo Lanza Queiroz & Cássio Maldonado Turra & Elisenda Renteria Perez, 2006. "The Opportunities We Cannot Forgo: Economic Consequences Of Population Changes In Brazil," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 32, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  2. Bloom, David & Canning, David, 2006. "Global Demography: Fact, Force and Future," MPRA Paper 2577, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  3. Rod Tyers & Jane Golley & Ian Bain, 2007. "Projected Economic Growth in China and India: The Role of Demographic Change," ANUCBE School of Economics Working Papers 2006-477, Australian National University, College of Business and Economics, School of Economics. [Downloadable!]
  4. Arno Tausch & Almas Heshmati & Chemen S.J. Bajalan, 2007. "On the Multivariate Analysis of the "Lisbon Process"," IZA Discussion Papers 3198, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Pascal Hetze & Carsten Ochsen, 2005. "How Aging of the Labor Force Affects Equilibrium Unemployment," Thuenen-Series of Applied Economic Theory 57, University of Rostock, Institute of Economics, Germany. [Downloadable!]
  6. Marianna Brunetti, 2007. "Population ageing, household portfolios and financial asset returns: A survey of the literature," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 07051, Universita di Modena e Reggio Emilia, Facoltà di Economia "Marco Biagi". [Downloadable!]
  7. L. Randall Wray, 2006. "Social security in an aging society," Review of Political Economy, Taylor and Francis Journals, vol. 18(3), pages 391-411, July. [Downloadable!] (restricted)
  8. David E. Bloom & David Canning, 2006. "Demographic challenges, fiscal sustainability and economic growth," PGDA Working Papers 0806, Program on the Global Demography of Aging. [Downloadable!]
  9. Peter S. Heller, 2006. "Is Asia Prepared for an Aging Population?," IMF Working Papers 06/272, International Monetary Fund. [Downloadable!]
  10. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2007. "Local Governments in the Wake of Demographic Change: Efficiency and Economies of Scale in German Municipalities," ZEW Discussion Papers 07-036, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  11. Werner Dirschmid & Ernst Glatzer, 2004. "Determinants of the Household Saving Rate in Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 25-38, December. [Downloadable!]
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