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Growth Effects of Age-related Productivity Differentials in an Ageing Society. A Simulation Study for Austria

Author

Listed:
  • Hofer, Helmut

    (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria)

  • Url, Thomas

    (Austrian Institute of Economic Research)

Abstract

We integrate age specific productivity differentials into a long-run neoclassical growth model for the Austrian economy with a highly disaggregated labor supply structure. We assume two life time productivity profiles reflecting either small or large hump-shaped productivity differentials and compute an average labor productivity index using three different aggregation functions: linear, Cobb-Douglas, and a nested Constant Elasticity of Substitution (CES). Model simulations with age specific productivity differentials are compared to a base scenario with uniform productivity over age groups. Depending on the aggregation function, the simulation results show only negligible or small negative effects on output and other macroeconomic key variables.

Suggested Citation

  • Hofer, Helmut & Url, Thomas, 2005. "Growth Effects of Age-related Productivity Differentials in an Ageing Society. A Simulation Study for Austria," Economics Series 179, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihsesp:179
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    File URL: https://irihs.ihs.ac.at/id/eprint/1667
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    More about this item

    Keywords

    Age specific productivity; Demographic change; Model simulation;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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