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Measuring the Contribution of Demographic Change and Human Capital to Economic Growth in Russia

Author

Listed:
  • Natalia Akindinova

    (National Research University Higher School of Economics, Moscow, Russia)

  • Kseniya Chekina

    (National Research University Higher School of Economics, Moscow, Russia)

  • Alexandr Yarkin

    (National Research University Higher School of Economics, Moscow, Russia)

Abstract

This article offers a new approach to growth accounting in Russia, identifying fundamental and cyclical components, including capacity utilisation and the employment level. A detailed decomposition of the labour contribution to growth is conducted to identify demographic effects. A modified index of human capital is developed that considers the impact on GDP of educational attainment (based on PISA scores) and changes in health (the fall in mortality among those of working age). This is used to refine the historical trend in total factor productivity. The article provides the results of a decomposition of the historical GDP trend in Russia in 2000–2016, and of two long-term forecasts of economic growth, along with the contribution of the individual components. It is shown that under the inertia scenario the labour contribution to growth will be negative across the whole period to 2035. Given established trends in investment and total factor productivity, and moderate oil prices, the long-term growth rate in Russia will remain close to 1% a year. These negative demographic effects cannot be fully offset through a reform of the pension system. At the same time, it is shown that a rapid convergence with the level of human capital in developed countries would allow for a significant acceleration in the rate of economic growth.

Suggested Citation

  • Natalia Akindinova & Kseniya Chekina & Alexandr Yarkin, 2017. "Measuring the Contribution of Demographic Change and Human Capital to Economic Growth in Russia," HSE Economic Journal, National Research University Higher School of Economics, vol. 21(4), pages 533-561.
    • Handle: RePEc:hig:ecohse:2017:4:2
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    Citations

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    Cited by:

    1. Kalabikhina, I. & Kazbekova, Z., 2022. "The impact of the first demographic dividend on economic growth considering human capital," Journal of the New Economic Association, New Economic Association, vol. 55(3), pages 81-100.
    2. A. N. Klepach & R. F. Luk’yanenko, 2023. "Healthcare in Russia: Macroeconomic Parameters and Structural Issues," Studies on Russian Economic Development, Springer, vol. 34(2), pages 207-220, April.
    3. B. M. Mukhamediyev & L. S. Spankulova, 2022. "Mutual Influence of Innovation and Human Capital on Regional Growth in Neighboring Countries: The Case of Russia and Kazakhstan," Regional Research of Russia, Springer, vol. 12(3), pages 350-364, September.
    4. E. A. Orlova & D. R. Belousov & D. I. Galimov, 2020. "A Model of Potential GDP and Output Gap for the Russian Economy," Studies on Russian Economic Development, Springer, vol. 31(2), pages 171-180, March.

    More about this item

    Keywords

    decomposition of economic growth rates; demographic dividend; human capital; convergence; PISA; mortality in working-age population;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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