IDEAS home Printed from https://ideas.repec.org/a/kea/keappr/ker-20130630-29-1-03.html
   My bibliography  Save this article

The Growth Effects of Population Aging in an Economy with Endogenous Technological Progress

Author

Listed:
  • Young Jun Chun

    (Hanyang University)

Abstract

We address the effects of population aging on economic growth, taking account of its growth-delaying effects, through the reduction of capital accumulation and labor force, and the R&D investment reduction due to its lowered return resulting from reduced market size, as well as its growth-promoting effects, through the increase in educational investment due to decrease in the number of child per parent. The policy simulations with a general equilibrium model and its calibration, reflecting the Korean economy, show that: (1) the population aging delays technological progress as well as quantitative economic growth; (2) the government subsidies to R&D and educational investment can partly compensate for the loss in economic growth due to the population aging, but they cannot deal with the problem fundamentally; and (3) the optimal subsidy rates to R&D and education are quite high, ranging from 50 to 70% to R&D and from 70 to 80% to education.

Suggested Citation

  • Young Jun Chun, 2013. "The Growth Effects of Population Aging in an Economy with Endogenous Technological Progress," Korean Economic Review, Korean Economic Association, vol. 29, pages 51-80.
    • Handle: RePEc:kea:keappr:ker-20130630-29-1-03
    as

    Download full text from publisher

    File URL: http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-20130630-29-1-03.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pilat, Dirk, 1995. "Comparative productivity of Korean manufacturing, 1967-1987," Journal of Development Economics, Elsevier, vol. 46(1), pages 123-144, February.
    2. David E. Bloom & David Canning & Günther Fink, 2010. "Implications of population ageing for economic growth," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(4), pages 583-612, Winter.
    3. Gary S. Becker & H. Gregg Lewis, 1974. "Interaction between Quantity and Quality of Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 81-90, National Bureau of Economic Research, Inc.
    4. Jagadeesh Gokhale & Laurence J. Kotlikoff & John Sabelhaus, 1996. "Understanding the Postwar Decline in U.S. Saving: A Cohort Analysis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 315-407.
    5. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    6. Jungmin Lee, 2008. "Sibling size and investment in children’s education: an asian instrument," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(4), pages 855-875, October.
    7. Trostel, Philip A, 1993. "The Effect of Taxation on Human Capital," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 327-350, April.
    8. Takatoshi Ito & Andrew K. Rose, 2007. "Fiscal Policy and Management in East Asia," NBER Books, National Bureau of Economic Research, Inc, number ito_07-1.
    9. Gruber, Jonathan & Wise, David, 1998. "Social Security and Retirement: An International Comparison," American Economic Review, American Economic Association, vol. 88(2), pages 158-163, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wu, Feifei & Yang, Hongna & Gao, Bo & Gu, Yan, 2021. "Old, not yet rich? The impact of population aging on export upgrading in developing countries," China Economic Review, Elsevier, vol. 70(C).

    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. Prettner, Klaus & Bloom, David E. & Strulik, Holger, 2013. "Declining fertility and economic well-being: Do education and health ride to the rescue?," Labour Economics, Elsevier, vol. 22(C), pages 70-79.
    2. Michael Kuhn & Klaus Prettner, 2023. "Rising Longevity, Increasing the Retirement Age, and the Consequences for Knowledge‐based Long‐run Growth," Economica, London School of Economics and Political Science, vol. 90(357), pages 39-64, January.
    3. Tscheuschner, Paul, 2021. "Endogenous life expectancy and R&D-based economic growth," Hohenheim Discussion Papers in Business, Economics and Social Sciences 01-2021, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    4. Bloom, David E. & Kuhn, Michael & Prettner, Klaus, 2023. "Fertility in High-Income Countries: Trends, Patterns, Determinants, and Consequences," IZA Discussion Papers 16500, Institute of Labor Economics (IZA).
    5. Abeliansky, Ana Lucia & Prettner, Klaus, 2023. "Automation and population growth: Theory and cross-country evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 345-358.
    6. Belyakov, A.O. & Kurbatskiy, A.N. & Prettner, K., 2021. "The growth effects of anticipated versus unanticipated population aging," Journal of Mathematical Economics, Elsevier, vol. 94(C).
    7. Ea Hoppe Blaabæk & Mads Meier Jæger & Joseph Molitoris, 2020. "Family Size and Educational Attainment: Cousins, Contexts, and Compensation," European Journal of Population, Springer;European Association for Population Studies, vol. 36(3), pages 575-600, July.
    8. Silles, Mary A., 2010. "The implications of family size and birth order for test scores and behavioral development," Economics of Education Review, Elsevier, vol. 29(5), pages 795-803, October.
    9. Annarita BALDANZI & Alberto BUCCI & Klaus PRETTNER, 2016. "The Effects of Health Investments on Human Capital and R&D-Driven Economic Growth," Departmental Working Papers 2016-17, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    10. Peng, Fei & Anwar, Sajid & Kang, Lili, 2022. "Number of siblings, access to treated water and returns to education in China," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 526-538.
    11. Adriana D. Kugler & Santosh Kumar, 2017. "Preference for Boys, Family Size, and Educational Attainment in India," Demography, Springer;Population Association of America (PAA), vol. 54(3), pages 835-859, June.
    12. Haoming Liu & Li Li, 2022. "The quantity–quality fertility–education trade-off," IZA World of Labor, Institute of Labor Economics (IZA), pages 143-143, March.
    13. Vladimir Ponczek & Andre Portela Souza, 2012. "New Evidence of the Causal Effect of Family Size on Child Quality in a Developing Country," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 64-106.
    14. Federico Barbiellini Amidei & Matteo Gomellini & Paolo Piselli, 2018. "The contribution of demography to Italy's economic growth: a two-hundred-year-long story," Questioni di Economia e Finanza (Occasional Papers) 431, Bank of Italy, Economic Research and International Relations Area.
    15. Kasuga, Hidefumi & Morita, Yuichi, 2022. "The health gap and its effect on economic outcomes," Journal of Macroeconomics, Elsevier, vol. 74(C).
    16. repec:got:cegedp:140 is not listed on IDEAS
    17. Izmirlioglu, Yusuf, 2008. "The Impact of Population Ageing on Technological Progress and TFP Growth, with Application to United States: 1950-2050," MPRA Paper 24687, University Library of Munich, Germany.
    18. Dierk Herzer & Holger Strulik & Sebastian Vollmer, 2012. "The long-run determinants of fertility: one century of demographic change 1900–1999," Journal of Economic Growth, Springer, vol. 17(4), pages 357-385, December.
    19. Azam Mehtabul & Hang Saing Chan, 2018. "Is There Really a Trade-Off? Family Size and Investment in Child Quality in India," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(1), pages 1-12, January.
    20. Haoming Liu, 2014. "The quality–quantity trade-off: evidence from the relaxation of China’s one-child policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 565-602, April.
    21. Yamamura, Eiji, 2012. "Effects of siblings and birth order on income redistribution preferences," MPRA Paper 38658, University Library of Munich, Germany.

    More about this item

    Keywords

    Population Aging; Growth; Research and Development; Educational Investment;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

    Statistics

    Access and download statistics

    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:kea:keappr:ker-20130630-29-1-03. 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: KEA (email available below). General contact details of provider: https://edirc.repec.org/data/keaaaea.html .

    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.