The Impact of Demographics on Productivity and Inflation in Japan

Westelius, Niklas J.; Liu, Yihan

doi:10.5089/9781475559712.001

Cited by 18 publications

(5 citation statements)

References 6 publications

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“…The author finds that the inverse U-shaped relationship between labour force age structure and productivity growth peaks between ages 40 and 49 ( Feyrer, 2007 ). An inverted U-shaped peak between ages 40 and 49 for total factor productivity is also found by Werding (2008) for OECD countries and Liu and Westlius (2016) for Japan ( Werding, 2008 ; Westelius and Liu, 2016 ). Aiyar and Ebeke (2016) build on Feyrer's model and estimate that workforce ageing in Europe will decrease total factor productivity by 0.2 percentage points annually from 2014 to 2035 ( Aiyar and Ebeke, 2016 ).…”

Section: Literature Reviewsupporting

confidence: 59%

“…While keeping people in paid work at older ages may be desirable from a fiscal sustainability perspective, particularly where there are concerns regarding the sustainability of public pension outlays ( Naumann, 2014 ), there are suggestions that an older labour force may have adverse effects for the economy ( Feyrer, 2007 , 2008 , 2008 ; Werding, 2008 ; Westelius and Liu, 2016 ). These effects may occur through a number of mechanisms, including potentially lower labour productivity among older workers or insufficient labour market participation at older ages due to high rates of retirement ( Axelrad, 2018 ; Fisher et al, 2016 ; Van Rijn et al, 2014 ).…”

Section: Introductionmentioning

confidence: 99%

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Health, an ageing labour force, and the economy: Does health moderate the relationship between population age-structure and economic growth?

Cylus

Tayara

2021

Social Science & Medicine

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Research often suggests that population ageing will be detrimental for the economy due to increased labour market exits and lost productivity, however the role of population health and disability at older ages is not well established. We estimate the relationship between the size of the older working age population and economic growth across 180 countries from 1990 to 2017 to explore whether a healthy older working age population, as measured by age-specific Years Lived with Disability (YLDs), can moderate the relationship between an ageing labour force and real per capita GDP growth. Using country and year fixed effects models, we find that although an increase in the 55–69 year old share of the total population is associated with a reduction in real per capita GDP growth, the decline in economic growth is moderated if the population at that age is in good health. To demonstrate the magnitude of effects, we present model predicted real per capita GDP growth for a selection of countries from 2020 through 2100 comparing the 2017 country-specific baseline YLD rate to a simulated 5% improvement in YLDs. Our findings demonstrate that economic slowdowns attributable to population ageing are avoidable through policy interventions supporting healthy and active ageing.

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Section: Literature Reviewsupporting

confidence: 59%

Section: Introductionmentioning

confidence: 99%

Health, an ageing labour force, and the economy: Does health moderate the relationship between population age-structure and economic growth?

Cylus

Tayara

2021

Social Science & Medicine

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“…A large number of research results have shown that population aging directly leads to a reduction in the working-age population and a shrinking labor market, which slows down economic growth; although the negative impact on the capital-output ratio is not obvious, it may reduce labor productivity by significantly slowing down TFP growth or reducing the level of TFP and thus reduces the potential growth level of the economy in many Asian and European countries (Aiyar & Ebeke, 2016;Hsu, 2017;Thang, 2011;Westelius & Liu, 2016).…”

Section: Population Growth Ratementioning

confidence: 99%

The Impact of Foreign Direct Investment on Regional Economic Growth and Income Convergence a Panel Data Study in China

Zhu¹

2022

IBES

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Previous studies regarding the impact of FDI on regional economic growth and income convergence in China have mixed results and are far from being conclusive due to different datasets and methodologies used. This study thus used a panel data from China Statistical Yearbook covering all 31 Chinese regions to better understand the impact of FDI on regional economic growth and income convergence in China. For the period between 1999 and 2017, it found that neither FDI inflow nor labor has a statistically significant impact on the provincial economic growth. However, domestic investment in fixed assets does have a statistically significant impact on the provincial economic growth. Moreover, there is no absolute ? income convergence among regions. Nonetheless, there is a conditional ? income convergence (a moderate convergence speed of 7.49%) after controlling for all other growth factors: domestic investment in fixed assets, population growth rate, FDI inflow, export, and higher education enrollment.

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“…According to Westelius and Liu (2016) demographics matter, with a shrinking working age population having a negative impact on the price level. McKinnon and Schnabl (2006) have linked the deflationary pressure in the Japanese economy to persistent current account surpluses and lasting appreciation expectations.…”

Section: Introductionmentioning

confidence: 99%