IDEAS home Printed from https://ideas.repec.org/a/eee/joecag/v27y2024ics2212828x23000452.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this article

Generational economic dependency in aging Europe: Contribution of education and population changes

Author

Listed:
  • Rentería, Elisenda
  • Souto, Guadalupe
  • Istenič, Tanja
  • Sambt, Jože

Abstract

Europe is experiencing the challenges of aging. However, different evolutions of their dependency ratios are observed, stimulated in many cases by the baby boom generation entering retirement ages. Simultaneously, a huge educational expansion also started in the second half of the 20th century, but at different speeds and levels. Education has been pointed out as a possible solution to offset the impact of aging on the sustainability of the welfare state, but, is this true for all European countries? Have all of them taken advantage of previous lower demographic dependency ratios? In this paper, we try to answer these questions by estimating the change in demographic dependency from an economic perspective considering the implications of a changing educational composition. We combine economic profiles of production and consumption by age and educational level (obtained using the National Transfer Accounts methodology) and population projections by level of education to estimate the Economic Support Ratio (ESR) growth rates from 1950 to 2080 for 19 European countries. Results show that the positive ESR since 1970 for a majority of countries is, in most cases, driven by an universal educational expansion, as the expected positive effect of the post-war baby boom is not observed in all countries. Around 2010–15, the ESR growth turns negative in many countries, as population aging cannot be offset anymore by on-going educational increases. In the future, the age effect will be the main driver of the ESR evolution due to the strong aging process, and an educational expansion almost fulfilled.

Suggested Citation

  • Rentería, Elisenda & Souto, Guadalupe & Istenič, Tanja & Sambt, Jože, 2024. "Generational economic dependency in aging Europe: Contribution of education and population changes," The Journal of the Economics of Ageing, Elsevier, vol. 27(C).
    • Handle: RePEc:eee:joecag:v:27:y:2024:i:c:s2212828x23000452
    DOI: 10.1016/j.jeoa.2023.100485
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2212828X23000452
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jeoa.2023.100485?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kelley, Allen C & Schmidt, Robert M, 1996. "Saving, Dependency and Development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(4), pages 365-386, November.
    2. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Human Capital and Rates of Return," Chapters, in: Geraint Johnes & Jill Johnes (ed.), International Handbook on the Economics of Education, chapter 1, Edward Elgar Publishing.
    3. Wolfgang Lutz & Jesus Crespo Cuaresma & Endale Kebede & Alexia Prskawetz & Warren C. Sanderson & Erich Striessnig, 2019. "Education rather than age structure brings demographic dividend," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(26), pages 12798-12803, June.
    4. Ronald Lee & Andrew Mason, 2010. "Some macroeconomic aspects of global population aging," Demography, Springer;Population Association of America (PAA), vol. 47(1), pages 151-172, March.
    5. Bloom, David E & Williamson, Jeffrey G, 1998. "Demographic Transitions and Economic Miracles in Emerging Asia," The World Bank Economic Review, World Bank, vol. 12(3), pages 419-455, September.
    6. Gøsta Esping-Andersen & Francesco C. Billari, 2015. "Re-theorizing Family Demographics," Population and Development Review, The Population Council, Inc., vol. 41(1), pages 1-31, March.
    7. Nicholas Gailey & Wolfgang Lutz, 2018. "Summary of ‘Demographic and human capital scenarios for the 21st century: 2018 assessment for 201 countries’," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 16(1), pages 221-234.
    8. Antoin E. Murphy, 2000. "The 'Celtic Tiger' - An Analysis of Ireland's Economic Growth Performance," EUI-RSCAS Working Papers 16, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    9. Jesús Crespo Cuaresma & Wolfgang Lutz & Warren Sanderson, 2014. "Is the Demographic Dividend an Education Dividend?," Demography, Springer;Population Association of America (PAA), vol. 51(1), pages 299-315, February.
    10. Elisenda Rentería & Guadalupe Souto & Iván Mejía-Guevara & Concepció Patxot, 2016. "The Effect of Education on the Demographic Dividend," Population and Development Review, The Population Council, Inc., vol. 42(4), pages 651-671, December.
    11. Gabriele Ballarino & Elena Meschi & Francesco Scervini, 2013. "GINI DP 83: The expansion of education in Europe in the 20th Century," GINI Discussion Papers 83, AIAS, Amsterdam Institute for Advanced Labour Studies.
    12. Robert M. Schmidt & Allen C. Kelley, 1996. "Saving, dependency and development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(4), pages 365-386.
    13. Jan Van Bavel & David S. Reher, 2013. "The Baby Boom and Its Causes: What We Know and What We Need to Know," Population and Development Review, The Population Council, Inc., vol. 39(2), pages 257-288, June.
    14. Naohiro Ogawa & Norma Mansor & Sang-Hyop Lee & Michael R.M. Abrigo & Tahir Aris, 2021. "Population Aging and the Three Demographic Dividends in Asia," Asian Development Review, MIT Press, vol. 38(1), pages 32-67, March.
    15. Guillaume Marois & Patrick Sabourin & Alain Bélanger, 2019. "How reducing differentials in education and labor force participation could lessen workforce decline in the EU-28," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 41(6), pages 125-160.
    16. Kashnitsky, Ilya & de Beer, Joop & van Wissen, Leo, 2017. "Decomposition of regional convergence in population aging across Europe," OSF Preprints ykqbv, Center for Open Science.
    17. Alexia Prskawetz & Jože Sambt, 2014. "Economic support ratios and the demographic dividend in Europe," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 30(34), pages 963-1010.
    18. David E. Bloom & David Canning, 2003. "How Demographic Change can Bolster Economic Performance in Developing Countries," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 4(4), pages 1-14, October.
    19. Ema Kelin & Tanja Istenič & Jože Sambt, 2022. "Education as a partial remedy for the economic pressure of population ageing," International Journal of Manpower, Emerald Group Publishing Limited, vol. 44(9), pages 37-54, December.
    20. Elke Loichinger, 2015. "Labor force projections up to 2053 for 26 EU countries, by age, sex, and highest level of educational attainment," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 32(15), pages 443-486.
    21. Luis Rosero‐Bixby, 2011. "Generational Transfers and Population Aging in Latin America," Population and Development Review, The Population Council, Inc., vol. 37(Supplemen), pages 143-157, January.
    22. Oosthuizen, Morné J., 2015. "Bonus or mirage? South Africa’s demographic dividend," The Journal of the Economics of Ageing, Elsevier, vol. 5(C), pages 14-22.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rocha de Jesus Fernandes, Anderson & Lanza Queiroz, Bernardo, 2024. "Aging, education and some other implications for the silver dividend in developing countries: Evidence from Brazil," The Journal of the Economics of Ageing, Elsevier, vol. 27(C).
    2. Oosthuizen, Morné, 2024. "Education and South Africa’s waning demographic dividend," The Journal of the Economics of Ageing, Elsevier, vol. 27(C).
    3. Ilya Kashnitsky & Joop De Beer & Leo Van Wissen, 2020. "Economic Convergence In Ageing Europe," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(1), pages 28-44, February.
    4. Das Gupta, Monica & Bongaarts, John & Cleland, John, 2011. "Population, poverty, and sustainable development : a review of the evidence," Policy Research Working Paper Series 5719, The World Bank.
    5. Lindh, Thomas & Malmberg, Bo, 2007. "Demographically based global income forecasts up to the year 2050," International Journal of Forecasting, Elsevier, vol. 23(4), pages 553-567.
    6. Aiyar, Shekhar & Duval, Romain & Puy, Damien & Wu, Yiqun & Zhang, Longmei, 2018. "Growth slowdowns and the middle-income trap," Japan and the World Economy, Elsevier, vol. 48(C), pages 22-37.
    7. Kashnitsky, Ilya & de Beer, Joop & van Wissen, Leo, 2017. "Decomposition of regional convergence in population aging across Europe," OSF Preprints ykqbv, Center for Open Science.
    8. Roli Misra, 2015. "Impact of Demographic Dividend on Economic Growth," International Studies, , vol. 52(1-4), pages 99-117, January.
    9. Kogel, Tomas, 2005. "Youth dependency and total factor productivity," Journal of Development Economics, Elsevier, vol. 76(1), pages 147-173, February.
    10. Choo, Eddie & Gee, Christopher, 2024. "Age and education effects in Singapore’s demographic dividend 1970–2020," The Journal of the Economics of Ageing, Elsevier, vol. 27(C).
    11. Spielauer, Martin & Horvath, Thomas & Fink, Marian & Abio, Gemma & Souto, Guadalupe & Patxot, Ció & Istenič, Tanja, 2023. "The effect of educational expansion and family change on the sustainability of public and private transfers," The Journal of the Economics of Ageing, Elsevier, vol. 25(C).
    12. Amarante, Verónica & Bucheli, Marisa & Colacce, Maira & Nathan, Mathias, 2021. "Aging, education and intergenerational flows in Uruguay," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    13. Hénoc Mpongo Mbulo, 2022. "« Impact du dividende démographique sur la croissance économique en République Démocratique du Congo (RDC) ; une approche par la modélisation AutoRegressive Distributed Lag (ARDL) »," Working Papers halshs-03735863, HAL.
    14. Miguel Sánchez-Romero, 2013. "The role of demography on per capita output growth and saving rates," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1347-1377, October.
    15. Neha Jain & Srinivas Goli, 2022. "Demographic change and private savings in India," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 24(1), pages 1-29, June.
    16. Gemma Estrada & Donghyun Park & Arief Ramayandi, 2012. "Population aging and aggregate consumption in developing Asia," Chapters, in: Donghyun Park & Sang-Hyop Lee & Andrew Mason (ed.), Aging, Economic Growth, and Old-Age Security in Asia, chapter 4, pages 111-129, Edward Elgar Publishing.
    17. Douglas Gollin & Fabian Lange, 2013. "Equipping immigrants: migration flows and capital movements in small open economies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(4), pages 749-777, December.
    18. David E. Bloom & David Canning & Jocelyn E. Finlay, 2010. "Population Aging and Economic Growth in Asia," NBER Chapters, in: The Economic Consequences of Demographic Change in East Asia, pages 61-89, National Bureau of Economic Research, Inc.
    19. Lindh, T. & Malmberg, B., 1999. "Age Distributions and the Current Account - A Changing Relation?," Papers 1999:21, Uppsala - Working Paper Series.
    20. Sirajul Islam & Prodip Chandra Roy, 2024. "Impact of Demographic Dividend on Economic Growth: Bangladesh Perspective," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(2), pages 95-123, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joecag:v:27:y:2024:i:c:s2212828x23000452. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/the-journal-of-the-economics-of-ageing .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.