IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0296512.html
   My bibliography  Save this article

Dose the increasing burden of social endowment affect sustainable development of economy?

Author

Listed:
  • Zhiyang Yu
  • Jin Chen
  • Runfa Yu

Abstract

The rapid increase in the number of older people under the background of population aging has gradually changed the disease spectrum of society, making aging diseases more prevalent, and increasing the demand for health care services, medical and health services, and health insurance among older people, ultimately leading to increasing household and social spending on old age. This study is conducted to assess the impact of those spending burden on the sustainable development of economy and find out some practical and effective solutions. This paper constructs a theoretical model to illustrate the relationship between the old-age dependency ratio and the marginal product of capital (MPK), and then establishes a two-way fixed effect model based on transnational panel data of 81 countries from 1981 to 2017 to verify this relationship empirically. This paper finds that, after controlling a series of variables, an increased burden of old-age dependency leads to a decline in the MPK, a key macroeconomic variable and also a sustainable development criteria, but in which health care, health security systems, and technological innovation play a key and moderating role. The conclusion is also valid after tackling the problem of endogeneity with different methods, like two-stage least squares (TSLS) and the generalized methods of moments (GMM). Overall, before population aging, countries that are old-but-not-rich should encourage more supply-side investments in public health system or technological innovation, and adjust retirement system, or gradually encourage childbearing to strive for time and space for later sustainable development of public health system and economy.

Suggested Citation

  • Zhiyang Yu & Jin Chen & Runfa Yu, 2024. "Dose the increasing burden of social endowment affect sustainable development of economy?," PLOS ONE, Public Library of Science, vol. 19(1), pages 1-14, January.
  • Handle: RePEc:plo:pone00:0296512
    DOI: 10.1371/journal.pone.0296512
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0296512
    Download Restriction: no

    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0296512&type=printable
    Download Restriction: no

    File URL: https://libkey.io/10.1371/journal.pone.0296512?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. 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.
    2. Ikeda, Daisuke & Saito, Masashi, 2014. "The effects of demographic changes on the real interest rate in Japan," Japan and the World Economy, Elsevier, vol. 32(C), pages 37-48.
    3. Sudo, Nao & Takizuka, Yasutaka, 2020. "Population Aging And The Real Interest Rate In The Last And Next 50 Years: A Tale Told By An Overlapping Generations Model," Macroeconomic Dynamics, Cambridge University Press, vol. 24(8), pages 2060-2103, December.
    4. Honda, Jiro & Miyamoto, Hiroaki, 2021. "How does population aging affect the effectiveness of fiscal stimulus over the business cycle?," Journal of Macroeconomics, Elsevier, vol. 68(C).
    5. Robert J. Gordon, 2015. "Secular Stagnation: A Supply-Side View," American Economic Review, American Economic Association, vol. 105(5), pages 54-59, May.
    6. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    7. Gauti B. Eggertsson & Manuel Lancastre & Lawrence H. Summers, 2019. "Aging, Output Per Capita, and Secular Stagnation," American Economic Review: Insights, American Economic Association, vol. 1(3), pages 325-342, December.
    8. Kelley, Allen C, 1988. "Economic Consequences of Population Change in the Third World," Journal of Economic Literature, American Economic Association, vol. 26(4), pages 1685-1728, December.
    9. Warren C. Sanderson & Sergei Scherbov, 2007. "A new perspective on population aging," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 16(2), pages 27-58.
    10. Andrew Mason & Ronald Lee & members of the NTA Network, 2022. "Six Ways Population Change Will Affect the Global Economy," Population and Development Review, The Population Council, Inc., vol. 48(1), pages 51-73, March.
    11. Giuseppe Ferrero & Marco Gross & Stefano Neri, 2019. "On secular stagnation and low interest rates: Demography matters," International Finance, Wiley Blackwell, vol. 22(3), pages 262-278, December.
    12. Francesca Carta & Francesco D'Amuri & Till von Wachter, 2020. "workforce aging, pension reforms, and firm outcomes," Temi di discussione (Economic working papers) 1297, Bank of Italy, Economic Research and International Relations Area.
    13. Li, Hongbin & Zhang, Jie & Zhang, Junsen, 2007. "Effects of longevity and dependency rates on saving and growth: Evidence from a panel of cross countries," Journal of Development Economics, Elsevier, vol. 84(1), pages 138-154, September.
    14. Leff, Nathaniel H, 1969. "Dependency Rates and Savings Rates," American Economic Review, American Economic Association, vol. 59(5), pages 886-896, December.
    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. Cristian Colther & Jean Pierre Doussoulin, 2025. "Recent Applications and Developments of the Cobb–Douglas Function: From Productivity to Sustainability," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 1646-1666, March.

    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. Gilles Dufrénot & Mathilde Esposito & Eva Moreno-Galbis, 2024. "Demographic Winter, Economic Structure and Productivity in Japan," AMSE Working Papers 2426, Aix-Marseille School of Economics, France.
    2. Ho, Paul, 2024. "Estimating the effects of demographics on interest rates: A robust Bayesian perspective," Journal of Economic Dynamics and Control, Elsevier, vol. 158(C).
    3. José Alves & Sandro Morgado, 2024. "Secular stagnation: Is immigration part of the solution?," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 1426-1449, March.
    4. Emerson, Patrick & Knabb, Shawn & Sirbu, Anca-Ioana, 2024. "Does the old-age dependency ratio place a drag on secular growth?," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1056-1070.
    5. Karel Brůna & Jiří Pour, 2023. "Population aging and structural over/underinvestment," Economic Change and Restructuring, Springer, vol. 56(4), pages 2339-2383, August.
    6. 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.
    7. Mathilde Esposito, 2024. "Workforce Aging and Potential Output Growth," Working Papers hal-04747557, HAL.
    8. Jacopo Bonchi & Giacomo Caracciolo, 2021. "Declining natural interest rate in the US: the pension system matters," Temi di discussione (Economic working papers) 1317, Bank of Italy, Economic Research and International Relations Area.
    9. Marta Pascual-Sáez & David Cantarero-Prieto & María González-Diego, 2018. "Testing the effect of population ageing on national saving rates: panel data evidence from Europe," Working Papers. Collection B: Regional and sectoral economics 1803, Universidade de Vigo, GEN - Governance and Economics research Network.
    10. Lucas Fuhrer & Nils Herger, 2024. "Real Interest Rates and Population Growth across Generations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(8), pages 2171-2184, December.
    11. Eduardo Cavallo & Gabriel Sánchez & Patricio Valenzuela, 2018. "Gone with the wind: Demographic transitions and domestic saving," Review of Development Economics, Wiley Blackwell, vol. 22(4), pages 1744-1764, November.
    12. Brander, James A & Dowrick, Steve, 1994. "The Role of Fertility and Population in Economic Growth: Empirical Results from Aggregate Cross-National Data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(1), pages 1-25.
    13. Tuğba AKIN & Kıymet YAVUZASLAN, 2019. "The effects of demographic structures on savings in Eastern European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 10, pages 93-114, June.
    14. Boultzis, Ilias, 2025. "Preying on the young: Intergenerational conflict, rent seeking and growth," European Economic Review, Elsevier, vol. 173(C).
    15. Andreas Andersson & Par Osterholm, 2006. "Population age structure and real exchange rates in the OECD," International Economic Journal, Taylor & Francis Journals, vol. 20(1), pages 1-18.
    16. Ciaffi, Giovanna & Deleidi, Matteo & Di Bucchianico, Stefano, 2024. "Stagnation despite ongoing innovation: Is R&D expenditure composition a missing link? An empirical analysis for the US (1948–2019)," Technological Forecasting and Social Change, Elsevier, vol. 206(C).
    17. Österholm, Pär, 2004. "Estimating the Relationship between Age Structure and GDP in the OECD Using Panel Cointegration Methods," Working Paper Series 2004:13, Uppsala University, Department of Economics.
    18. Mr. Serkan Arslanalp & Mr. Jaewoo Lee & Umang Rawat, 2018. "Demographics and Interest Rates in Asia," IMF Working Papers 2018/172, International Monetary Fund.
    19. Lei He & Na Li, 2020. "The linkages between life expectancy and economic growth: some new evidence," Empirical Economics, Springer, vol. 58(5), pages 2381-2402, May.
    20. Papetti, Andrea, 2021. "Demographics and the natural real interest Rate: historical and projected paths for the euro area," Journal of Economic Dynamics and Control, Elsevier, vol. 132(C).

    More about this item

    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:plo:pone00:0296512. 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: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    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.