The effects of age structure on economic growth: An application of probabilistic forecasting to India

Prskawetz, Alexia; Kögel, Tomas; Sanderson, Warren C.; Scherbov, Sergei

doi:10.1016/j.ijforecast.2007.08.001

Cited by 25 publications

(21 citation statements)

References 33 publications

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“…This finding is consistent with that of Prskawetz et al (2007), who suggest that a decrease in the fertility rate reduces the young-age dependency ratio, thereby providing more opportunities for economic growth. This suggests that the declining fertility rate should not be of concern to policy makers as it will not have an immediate negative impact on future economic development.…”

Section: Conclusion and Policy Implicationssupporting

confidence: 91%

“…This suggests that as more resources are devoted to child-rearing, this has a negative impact on output. This is consistent with Prskawetz et al (2007) assertion that by reducing the young-age dependency ratio, through a reduction in the fertility rate, more opportunities are provided for economic growth.…”

Section: Orthogonalized Impulse Response Functionssupporting

confidence: 90%

“…Further to this, an aging population may also reduce the labour effort available within the economy (Caldwell and Schindlmayr 2003). Prskawetz et al (2007) suggests that a declining fertility rate can have a positive impact on economic growth. Bloom and Williamson (1998) identify two mechanisms through which this can occur.…”

Section: Demographics Negatively Impact Growthmentioning

confidence: 99%

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An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland

Doran

2012

International Journal of Social Economics

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Original citationAn analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland", International Journal of Social Economics, Vol. An Analysis of the Interdependence of Demographic Factors, Labour Effort and Economic Growth in IrelandAbstract Purpose -The purpose of this article is to analyse the effects of a declining birth rate and an increasing old age-population ratio on Ireland's economic output. Design-Methodology/Approach -This paper utilises data on the birth rate, old-age population ratio, economic output and labour effort of the Irish economy to estimate a vector-autoregressive model. The results of this model are then analysed to test for the presence of Granger causality among these variables. In doing so it is possible to assess whether there are statistically significant causal relationships existing among these factors. Subsequently, impulse response functions are derived from this model in order to assess the magnitude of the causal relationships. Findings -The results suggest that declining fertility rates and increases in the old-age dependency ratio have a significant impact on labour effort and economic output. Labour effort is also found to explain variation in the fertility rate and economic output. Economic output is found to effect labour effort and the fertility rate. Social Implications -The results derived in this paper raise interesting policy implications. It is evident that Ireland's declining birth rate and increasing old-age population ratio are creating a demographic situation which will have implications for future economic growth. Policies need to be put in place to mitigate the negative effects these factors will have on Irish growth. Originality/Value -This paper adopts modern econometric techniques to assess the causal relationships which exist between the demographic and economic factors considered. These have not previously been applied to the Irish situation. In doing this, this paper provides an important insight into the changing dynamics of the Irish economy.

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Section: Conclusion and Policy Implicationssupporting

confidence: 91%

Section: Orthogonalized Impulse Response Functionssupporting

confidence: 90%

Section: Demographics Negatively Impact Growthmentioning

confidence: 99%

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An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland

Doran

2012

International Journal of Social Economics

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“…Various theoretical and empirical studies have shown that population ageing – that is, changes in the population age structure that result in a shrinking relative size of the working age population – has a negative effect on economic growth (Bloom & Williamson ; Prskawetz et al ; Bloom et al ; Crespo Cuaresma et al ; van der Gaag & De Beer ). A decline in the size of the working age population has a downward effect on GDP per capita, whereas an increase in the number of elderly citizens has an upward effect on costs of pensions and care (Kluge ; van Nimwegen ; Kluge et al ).…”

Section: Theoretical Considerations and The Proposed Frameworkmentioning

confidence: 99%

Economic Convergence In Ageing Europe

Kashnitsky

Beer

Wissen

2019

Tijd voor Econ & Soc Geog

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European regions experience accelerating ageing, but the process has substantial regional variation. This paper examines the effect of this variation on regional economic cohesion in Europe. We measure the effect of convergence or divergence in the share of the working age population on convergence or divergence in economies of NUTS 2 regions. The effect of convergence or divergence in ageing on economic convergence or divergence is quite substantial and, in some cases, is bigger than the effect of changes in productivity and labour force participation. Convergence of ageing leads to economic convergence only when the share of the working age population in rich regions exceeds that in poor regions and the former regions experience a substantial decline in the share of the working age population, or the latter regions experience an increase. During 2003-12, an inverse relationship between convergence in ageing and economic convergence was the rule rather than the exception.

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“…changes in the population age structure that result in a shrinking relative size of the working age population -has a negative effect on economic growth (Bloom and Williamson, 1998;Bloom et al, 2010;Crespo Cuaresma et al, 2014b;Prskawetz et al, 2007;Van Der Gaag and De Beer, 2015). A decline in the size of the working age population has a downward effect on GDP per capita, whereas an increase in the number of elderly citizens has an upward effect on costs of pensions and care (Kluge, 2013;Kluge et al, 2018;Van Nimwegen, 2013).…”

Section: Theoretical Considerations and The Proposed Frameworkmentioning

confidence: 99%