The impact of population aging in rich countries: What’s the future?

Papapetrou, Evangelia; Tsalaporta, Pinelopi

doi:10.1016/j.jpolmod.2019.12.002

Cited by 14 publications

(9 citation statements)

References 25 publications

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“…Population ageing exerts a significant impact on the macroeconomy. This study investigated the impact of population ageing on economic growth by proxying the growth rate of GDP per capita for economic growth in line with previous empirical growth models (Antonakakis & Workie, 2023;Lee & Shin, 2019;Papapetrou & Tsalaporta, 2020). In contrast to majority of the prior studies, which assumed a linear relationship between population ageing and economic growth (Bawazir et al, 2020;Eggertsson et al, 2019;Fukuda & Morozumi, 2004;Herzog, 2012;Huang et al, 2019;Ismail et al, 2016;Li & Zhang, 2015;Lindh & Malmberg, 2009;Maestas et al, 2023;Mamun et al, 2020;Miri et al, 2019;Park et al, 2012;Ruidong, 2018;Uddin et al, 2016;Wongboonsin & Phiromswad, 2017;Zhao et al, 2018), our study analyses a non-linear relation.…”

Section: Discussionmentioning

confidence: 99%

The implications of population ageing on economic growth: Evidence of nonlinearity

Lobo,

Falleiro

2024

5002

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The purpose of this study is to investigate the influence of population ageing on economic growth, a topic that has received inconclusive results. The Fixed Effects Model is used to analyze 5-year non-overlapping growth regressions on a panel of 72 nations spanning three decades. Data is extracted from the World Bank database and Penn World Tables. Findings indicate that in the short-run, population ageing positively impacts economic growth; nevertheless, a nonlinear relationship is observed in the long-run, highlighting the existence of a threshold. The findings remain robust upon proxying the old-age dependency ratio for the share of the elderly. The study identifies the threshold below (above) at which ageing populations impact economic growth positively (negatively). Marginal Effects support our findings, establishing that the detrimental effect on growth intensifies as ageing deepens. The research also identifies a notable nonlinear relationship between economic growth and population ageing in developed economies. Policy implications such as promoting healthy ageing, longer working years, encouraging savings, enhancing productivity via capital investments, and contributions of experienced older workers to the knowledge economy will facilitate reaping the silver demographic dividend and will help nations cope with and minimize the adverse impact of population ageing on economic growth.

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Section: Discussionmentioning

confidence: 99%

The implications of population ageing on economic growth: Evidence of nonlinearity

Lobo,

Falleiro

2024

5002

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“…The role of population aging on macroeconomic outcomes, such as inflation, output, labor force participation, is only until recently that has been studied extensively (Papapetrou and Tsalaporta, 2020). However, the effect of population aging on carbon emissions and in particular environmental degradation has not been studied considerably and the research outcome remains inconclusive.…”

Section: Population Aging Human Capital and Sustainable Development: ...mentioning

confidence: 99%

The effect of population aging on environmental degradation: new evidence and insights

Hondroyiannis¹,

Papapetrou²,

Tsalaporta³

2023

JES

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PurposeThe Organization for Economic Cooperation and Development (OECD) countries are facing unprecedented challenges related to climate change and population aging. The purpose of the analysis is to explore the relationship between population aging and environmental degradation, accounting for human capital, using a sample of 19 OECD countries over the period 1980–2019.Design/methodology/approachOn the empirical methodology, the analysis uses panel estimators with heterogenous coefficients and an error structure that takes into consideration cross-country heterogeneity and cross-sectional dependence for a panel of 19 OECD countries over the period 1980–2019. To examine the relationship between population aging and environmental degradation, the authors employ two alternative measures of environmental degradation that is energy consumption and CO2 emissions in metric tons per capita. Concerning the regressors, the authors account for two alternative aging indicators, namely the elderly population and the old-age dependency ratios to confirm robustness.FindingsThe analysis provides evidence that population aging and human capital development (IHC) lead to lower energy consumption in the OECD sample. Overall, the growing number of elderly people in the OECD seems to act as a mitigating factor for energy consumption. The authors view these results as conveying the message that the evolution of population aging along with channeling government expenditures towards human capital enhancement are important drivers of curbing energy consumption and ensuring environmental sustainability. The authors' research is of great significance for environmental policymakers by illuminating the favorable energy consumption patterns that population aging brings to advanced economies.Research limitations/implicationsThe main limitation of this study concerns data availability. Future research, and subject to greater data availability in the future, could dig deeper into understanding the dynamics of this complex nexus by incorporating additional control variables. Similarly, the authors focus on aggregate renewable energy consumption, and the authors do not explicitly model the sources of renewable energy (wind, hydropower, solar power, solid biofuels and other). Additional analysis of the breakdown of renewable energy sources would be insightful – subject to data availability – especially for meeting the recently agreed new target of 42.5% for European Union (EU) countries by 2030. A deep transformation of the European energy system is needed for the EU to meet the target. Finally, extending the model to include a range of non-OECD countries that are also experiencing demographic transformations is a promising avenue for future research.Originality/valueTo the best of the authors' knowledge, this study is the first to examine the effects of population aging and human capital on environmental degradation using a broad set of OECD countries and advanced spectrum estimation methods. Given cross-sectional dependencies and cross-country heterogeneity, the authors' empirical results underline the importance of cross-OECD policy spillovers and knowledge diffusions across the OECD countries. The new “energy culture” calls for concerted policy action even in an aging era.

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“…These findings highlight the intricate interplay between population aging, labor dynamics, and economic growth, contributing to our understanding of the multifaceted factors influencing macroeconomic performance. Authors such as Papapetrou and Tsalaporta (2020), and Liu and McKibbin (2022) also caution about the potential negative implications of the aging population if appropriate policies are not formulated.…”

Section: The Interplay Between Aging Populations and Economic Factorsmentioning

confidence: 99%

Charting the Course for Sustainable Aging: Socio-Environmental and Economic Impacts on Djiboutian Elderly Population

Aden

Dirir

2023

Culture. Society. Economy. Politics

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The aging population has become a crucial demographic trend worldwide, as it poses both economic and sustainable challenges to governments and societies. And, ostensibly, this unprecedented increase in the senior demographic is currently unfolding in East African nations, primarily, due to substantial advancements in the healthcare system and the commendable support and promotion of education within the region. In this context, the current article examines the relationship between the aging population, ecological footprint, consumption of renewable energy, governmental healthcare expenditures, trade, and urbanization within the context of the Republic of Djibouti. To investigate the data and explore the dynamics and interactions among variables, a comprehensive approach was employed, which involved utilizing an autoregressive distributed lag (ARDL) model, a Granger causality test, and both an impulse response function (IRF) and variance decomposition (VD) analyses. According to the ARDL findings, urbanization has a positive relationship with an aging population. In contrast, the health sector expenditures demonstrated a negative association with the elderly population in Djibouti. This indicates an alarming scenario where government spending on elderly care fails to effectively meet the specific needs of seniors due to insufficient funding, bureaucratic inefficiencies, and inadequate program implementation. Consequently, this leads to a significant gap in coverage for a large portion of the elderly population. On the other hand, it is worth noting that the well-being of the elderly population in Djibouti sees only a slight improvement influenced by the trade performance variable. Nonetheless, this positive impact is somewhat hindered by the lack of sufficient financial inclusion measures that should have ideally been driven by trade-related activities. Moreover, the study’s IRF and VR highlight a positive shock between the consumption of renewable energy and the well-being of the elderly population. Nevertheless, it is of utmost importance to recognize the detrimental impact of the ecological footprint, which significantly undermines the overall well-being of the aging population. Therefore, policymakers must carefully weigh and benefit the simultaneous effect of the advantages of renewable energy consumption on the environment, and on the well-being of the elderly population. It is also essential to emphasize the need to devise more inclusive policies that can comprehensively address this issue and improve the welfare of the elderly demographic.

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The impact of population aging in rich countries: What’s the future?

Cited by 14 publications

References 25 publications

The implications of population ageing on economic growth: Evidence of nonlinearity

The implications of population ageing on economic growth: Evidence of nonlinearity

The effect of population aging on environmental degradation: new evidence and insights

Charting the Course for Sustainable Aging: Socio-Environmental and Economic Impacts on Djiboutian Elderly Population

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