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Does Age Structure Forecast Economic Growth?

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Listed:
  • David E. Bloom
  • David Canning
  • Günther Fink
  • Jocelyn E. Finlay

Abstract

Increases in the proportion of the working age population can yield a "demographic dividend" that enhances the rate of economic growth. We estimate the parameters of an economic growth model with a cross section of countries over the period 1960 to 1980 and investigate whether the inclusion of age structure improves the model's forecasts for the period 1980 to 2000. We find that including age structure improves the forecast, although there is evidence of parameter instability between periods with an unexplained growth slowdown in the second period. We use the model to generate growth forecasts for the period 2000 to 2020.

Suggested Citation

  • David E. Bloom & David Canning & Günther Fink & Jocelyn E. Finlay, 2007. "Does Age Structure Forecast Economic Growth?," NBER Working Papers 13221, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13221
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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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