IDEAS home Printed from https://ideas.repec.org/a/wly/ectrin/v33y2025i2p253-274.html
   My bibliography  Save this article

Can the improvements in human capital quality mitigate the negative impact of ageing on growth? Evidence from selected EU countries

Author

Listed:
  • Izabela Sobiech Pellegrini
  • Rafał Chmura
  • Jakub Sawulski
  • Tymoteusz Mętrak

Abstract

Most long‐term GDP projections in developed countries expect a substantial decline in GDP growth rates over time. The main factor behind it is demographic changes, especially the decreasing working‐age population. We argue that these projections do not consider improvements in the quality of the human capital, which may, at least to some extent, mitigate the effects of the negative demographic shock. We start with a simple observation—the skills of younger age cohorts are higher than of older cohorts. Assuming that the current level of skills will be obtained also by the generations which will enter the labour market in the future, the average level of skills among the working‐age population will increase. Trying to catch this effect, we use the Programme for the International Assessment of Adult Competencies standardised test results to create an aggregate human capital measure, the average skill level of the work force, for 18 European Union countries and project it until 2040. We show that on average at least one sixth of the negative impact of the shrinking of the working‐age population can be offset by the increase in the quality of human capital and that this number can increase to three quarters in a less conservative scenario.

Suggested Citation

  • Izabela Sobiech Pellegrini & Rafał Chmura & Jakub Sawulski & Tymoteusz Mętrak, 2025. "Can the improvements in human capital quality mitigate the negative impact of ageing on growth? Evidence from selected EU countries," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 33(2), pages 253-274, April.
    • Handle: RePEc:wly:ectrin:v:33:y:2025:i:2:p:253-274
    DOI: 10.1111/ecot.12430
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecot.12430
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecot.12430?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. Katharine G. Abraham & Justine Mallatt, 2022. "Measuring Human Capital," Journal of Economic Perspectives, American Economic Association, vol. 36(3), pages 103-130, Summer.
    2. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    3. Noam Angrist & Simeon Djankov & Pinelopi K. Goldberg & Harry A. Patrinos, 2021. "Measuring human capital using global learning data," Nature, Nature, vol. 592(7854), pages 403-408, April.
    4. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    5. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    6. Filmer, Deon & Rogers, Halsey & Angrist, Noam & Sabarwal, Shwetlena, 2020. "Learning-adjusted years of schooling (LAYS): Defining a new macro measure of education," Economics of Education Review, Elsevier, vol. 77(C).
    7. Hanushek, Eric A. & Schwerdt, Guido & Wiederhold, Simon & Woessmann, Ludger, 2015. "Returns to skills around the world: Evidence from PIAAC," European Economic Review, Elsevier, vol. 73(C), pages 103-130.
    8. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2023. "Skills-displacing technological change and its impact on jobs: challenging technological alarmism?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 32(3), pages 370-392, April.
    9. Balázs Égert & Christine de la Maisonneuve & David Turner, 2024. "A new macroeconomic measure of human capital exploiting PISA and PIAAC: linking education policies to productivity," Education Economics, Taylor & Francis Journals, vol. 32(6), pages 745-761, November.
    10. Benjamin F. Jones, 2019. "The Human Capital Stock: A Generalized Approach: Reply," American Economic Review, American Economic Association, vol. 109(3), pages 1175-1195, March.
    11. Benjamin F. Jones, 2014. "The Human Capital Stock: A Generalized Approach," American Economic Review, American Economic Association, vol. 104(11), pages 3752-3777, November.
    12. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    13. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    14. Anna Ruzik-Sierdzinska & Claudia Villosio & Michele Belloni & Maciej Lis & Monika Potoczna, 2013. "Age and productivity. Human Capital Accumulation and Depreciation," CASE Network Reports 0114, CASE-Center for Social and Economic Research.
    15. James Feyrer, 2007. "Demographics and Productivity," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 100-109, February.
    16. Demirgüç-Kunt, Asli & Torre, Iván, 2022. "Measuring human capital in middle income countries," Journal of Comparative Economics, Elsevier, vol. 50(4), pages 1036-1067.
    17. Paczos, Wojtek & Sawulski, Jakub & Leśniewicz, Filip, 2023. "How much do public and private sectors invest in physical and human capital? Towards a new classification of investments," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 1324-1336.
    18. Gang Liu & Barbara M. Fraumeni, 2020. "A Brief Introduction to Human Capital Measures," NBER Working Papers 27561, National Bureau of Economic Research, Inc.
    19. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    20. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    21. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    22. Campbell, Susanna G. & Üngör, Murat, 2020. "Revisiting human capital and aggregate income differences," Economic Modelling, Elsevier, vol. 91(C), pages 43-64.
    23. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    24. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, vol. 160(1), pages 35-57, March.
    25. Liu, Gang & Fraumeni, Barbara M., 2020. "A Brief Introduction to Human Capital Measures," IZA Discussion Papers 13494, Institute of Labor Economics (IZA).
    26. John W. Kendrick, 1976. "The Formation and Stocks of Total Capital," NBER Books, National Bureau of Economic Research, Inc, number kend76-1, June.
    27. Yvan Guillemette & David Turner, 2021. "The long game: Fiscal outlooks to 2060 underline need for structural reform," OECD Economic Policy Papers 29, OECD Publishing.
    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. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    2. Nadir Altinok & Claude Diebolt, 2024. "Cliometrics of learning-adjusted years of schooling: evidence from a new dataset," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 18(3), pages 691-764, September.
    3. Rainer Kotschy & Uwe Sunde & Tommaso MonacelliManaging Editor, 2018. "Can education compensate the effect of population ageing on macroeconomic performance?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 33(96), pages 587-634.
    4. Ana Hidalgo-Cabrillana & Zoë Kuehn & Cristina Lopez-Mayan, 2017. "Development accounting using PIAAC data," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(4), pages 373-399, November.
    5. Young Eun Kim & Norman V. Loayza, 2019. "Productivity Growth: Patterns and Determinants across the World," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    6. Hanol Lee & Jong-Wha Lee, 2024. "Educational quality and disparities in income and growth across countries," Journal of Economic Growth, Springer, vol. 29(3), pages 361-389, September.
    7. Juneyoung Lee & Keun Lee, 2024. "Decoupling of functional and household income distribution by economic growth: new findings from analysing the three‐way growth‐equity nexus," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(5), pages 2270-2299, July.
    8. Kotschy, Rainer & Sunde, Uwe, 2016. "Skills, Aging, and Productivity: Evidence from Panel Data," VfS Annual Conference 2016 (Augsburg): Demographic Change 145895, Verein für Socialpolitik / German Economic Association.
    9. Campbell, Susanna G. & Üngör, Murat, 2020. "Revisiting human capital and aggregate income differences," Economic Modelling, Elsevier, vol. 91(C), pages 43-64.
    10. Battisti, Michele & Gatto, Massimo Del & Parmeter, Christopher F., 2022. "Skill-biased technical change and labor market inefficiency," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    11. Zhang, Xiaobei & Wang, Xiaojun, 2021. "Measures of human capital and the mechanics of economic growth," China Economic Review, Elsevier, vol. 68(C).
    12. Altinok, Nadir & Aydemir, Abdurrahman, 2017. "Does one size fit all? The impact of cognitive skills on economic growth," Journal of Macroeconomics, Elsevier, vol. 53(C), pages 176-190.
    13. David Kunst, 2019. "Deskilling among Manufacturing Production Workers," Tinbergen Institute Discussion Papers 19-050/VI, Tinbergen Institute, revised 30 Dec 2020.
    14. Oscar Hernán Cerquera Losada & María de los Ángeles Clavijo Tovar & Carla Yanella Pérez Peña, 2022. "Capital humano y crecimiento económico: evidencia empírica para Suramérica," Apuntes del Cenes, Universidad Pedagógica y Tecnológica de Colombia, vol. 41(73), pages 143-167, February.
    15. Angrist,Noam & Djankov,Simeon & Goldberg,Pinelopi Koujianou & Patrinos,Harry Anthony, 2019. "Measuring Human Capital," Policy Research Working Paper Series 8742, The World Bank.
    16. Stimpfle, Alexander & Stadelmann, David, 2016. "Marriage Age Affects Educational Gender Inequality: International Evidence," VfS Annual Conference 2016 (Augsburg): Demographic Change 145492, Verein für Socialpolitik / German Economic Association.
    17. Silves J.C. Moreira & Pedro Cosme Vieira & Aurora A.C. Teixeira, 2014. "Estimating the human capital stock for Cape Verde, 1950-2012," FEP Working Papers 547, Universidade do Porto, Faculdade de Economia do Porto.
    18. Ángel de la Fuente & Rafael Doménech, 2024. "Cross‐country data on skills and the quality of schooling: A selective survey," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 3-26, February.
    19. Georg Graetz & Guy Michaels, 2018. "Robots at Work," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 753-768, December.
    20. Falck, Oliver & Heimisch-Roecker, Alexandra & Wiederhold, Simon, 2021. "Returns to ICT skills," Research Policy, Elsevier, vol. 50(7).

    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:wly:ectrin:v:33:y:2025:i:2:p:253-274. 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: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)2577-6983 .

    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.