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Technology Adoption and Demographic Change

  • Karsten Wasiluk


    (Department of Economics, University of Konstanz, Germany)

This paper studies the effect of demographic change on the technology distribution of an economy and on aggregate productivity growth. In the quantitative dynamic model, firms decide on employment and the technology they use subject to an aging workforce. Firms with a higher share of elderly workers update their technology less often and prefer older technologies than firms with a younger workforce. The shorter expected worklife of elderly workers makes firms reluctant to train them for new technologies. I calibrate the model for the German economy and simulate the projected demographic change. The results indicate that labor force aging reduces the realized annual productivity growth rate by 0.28 percentage points between 2010–2025.

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Paper provided by Department of Economics, University of Konstanz in its series Working Paper Series of the Department of Economics, University of Konstanz with number 2014-05.

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Length: 31 pages
Date of creation: 22 Oct 2014
Date of revision:
Handle: RePEc:knz:dpteco:1405
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