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Population Aging and Economic Growth in Asia

In: The Economic Consequences of Demographic Change in East Asia, NBER-EASE Volume 19

  • David E. Bloom
  • David Canning
  • Jocelyn E. Finlay

The decline in the total fertility rate between 1960 and 2005, coupled with an increase in life expectancy and the dynamic evolution of past variation in birth and death rates, is producing a significant shift in age structure in Asia. The age distribution has shifted from one with a high youth-age population share to one with a high old-age population share. We illustrate the role of these separate forces in shaping the age distribution. We also argue that the economic consequences of population aging depend on behavioral responses to the shift in age structure: the female labor force participation response to the decline in fertility, child quality/quantity trade-off in the face of the fertility decline, savings adjustments to an increase in life expectancy, and social security distortions insofar as the pace of life expectancy improvements is faster than the pace of policy adjustments. We estimate the association between old- and youth-age population shares and economic growth. The results suggest that population aging may not significantly impede economic performance in Asia in the long run.

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This chapter was published in:
  • Takatoshi Ito & Andrew Rose, 2010. "The Economic Consequences of Demographic Change in East Asia, NBER-EASE Volume 19," NBER Books, National Bureau of Economic Research, Inc, number ito_08-2, September.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 8148.
    Handle: RePEc:nbr:nberch:8148
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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