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The Graying of Global Population and Its Macroeconomic Consequences

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Author Info

  • David E. Bloom

    () (Harvard School of Public Health)

  • David Canning

    () (Harvard School of Public Health)

  • Gunther Fink

    () (Harvard School of Public Health)

Abstract

Population aging is emerging as a major demographic trend in many countries, with potentially important implications for a variety of macroeconomic issues. Notwithstanding these challenges, population aging will likely have a comparatively modest effect on economic growth. Although the changed age distribution would be expected to cause the labor force participation rate to decrease, the ratio of labor force to population will actually increase in most countries. This will occur because the lower youth dependency rate and the increased rate of female labor force participation – both of which may reasonably be expected to follow from the fertility rate declines that are driving population aging – will counterbalance the shifting of adults toward older ages at which labor force participation and savings rates are lower. Behavioral and policy responses to population aging – including higher savings for retirement, a higher rate of human capital accumulation, alternate pension funding plans, and (possibly) increased migration from labor-abundant to labor-scarce countries – also suggest that population aging need not necessarily significantly impede economic growth.

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File URL: http://www.hsph.harvard.edu/pgda/WorkingPapers/2009/PGDA_WP_47.pdf
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Bibliographic Info

Paper provided by Program on the Global Demography of Aging in its series PGDA Working Papers with number 4709.

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Date of creation: Oct 2009
Date of revision:
Handle: RePEc:gdm:wpaper:4709

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Web page: http://www.hsph.harvard.edu/pgda
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Related research

Keywords: Global population; macroeconomics; aging;

This paper has been announced in the following NEP Reports:

References

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  1. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521725200.
  2. David E. Bloom & David Canning & Günther Fink, 2008. "Population Aging and Economic Growth," PGDA Working Papers 3108, Program on the Global Demography of Aging.
  3. Mariano Kulish & Christopher Kent & Kathryn Smith, 2010. "Aging, Retirement, and Savings: A General Equilibrium Analysis," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 18.
  4. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521898010.
  5. David E. Bloom & David Canning, 2004. "The Health and Wealth of Africa," World Economics, World Economics, Economic & Financial Publishing, PO Box 69, Henley-on-Thames, Oxfordshire, United Kingdom, RG9 1GB, vol. 5(2), pages 57-81, April.
  6. 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.
  7. John Bongaarts, 2006. "How Long Will We Live?," Population and Development Review, The Population Council, Inc., vol. 32(4), pages 605-628.
  8. Bloom, David E. & Canning, David & Mansfield, Richard K. & Moore, Michael, 2007. "Demographic change, social security systems, and savings," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 92-114, January.
  9. David Bloom & David Canning & Günther Fink & Jocelyn Finlay, 2009. "Fertility, female labor force participation, and the demographic dividend," Journal of Economic Growth, Springer, vol. 14(2), pages 79-101, June.
  10. David E. Bloom & David Canning & Bryan Graham, 2002. "Longevity and Life Cycle Savings," NBER Working Papers 8808, National Bureau of Economic Research, Inc.
  11. Gruber, Jonathan & Wise, David, 1998. "Social Security and Retirement: An International Comparison," American Economic Review, American Economic Association, vol. 88(2), pages 158-63, May.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Graying of Global Population and Its Macroeconomic Consequences
    by Ariel Goldring in Free Market Mojo on 2010-06-05 11:25:15
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Cited by:
  1. Klaus Prettner, 2009. "Population ageing and endogenous economic growth," Working Papers 0908, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
  2. Klaus Prettner & David Canning, 2012. "Increasing life expectancy and optimal retirement:does population aging necessarily undermine economic prosperity?," PGDA Working Papers 9112, Program on the Global Demography of Aging.

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