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Growth Effects of Age-related Productivity Differentials in an Ageing Society. A Simulation Study for Austria

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  • Hofer, Helmut

    (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria)

  • Url, Thomas

    (Austrian Institute of Economic Research)

Abstract

We integrate age specific productivity differentials into a long-run neoclassical growth model for the Austrian economy with a highly disaggregated labor supply structure. We assume two life time productivity profiles reflecting either small or large hump-shaped productivity differentials and compute an average labor productivity index using three different aggregation functions: linear, Cobb-Douglas, and a nested Constant Elasticity of Substitution (CES). Model simulations with age specific productivity differentials are compared to a base scenario with uniform productivity over age groups. Depending on the aggregation function, the simulation results show only negligible or small negative effects on output and other macroeconomic key variables.

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File URL: http://www.ihs.ac.at/publications/eco/es-179.pdf
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Bibliographic Info

Paper provided by Institute for Advanced Studies in its series Economics Series with number 179.

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Length: 29 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:ihs:ihsesp:179

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Keywords: Age specific productivity; Demographic change; Model simulation;

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Cited by:
  1. Jürgen Janger & Johann Scharler & Alfred Stiglbauer, 2006. "The Potential Growth Prospects of the Austrian Economy — Methods and Determinants," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 24–52.

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