Implications of Population Aging for Economic Growth

38 Pages Posted: 26 Jan 2011

See all articles by David E. Bloom

David E. Bloom

Harvard University - T.H. Chan School of Public Health; National Bureau of Economic Research (NBER)

David Canning

Harvard University - T.H. Chan School of Public Health

Günther Fink

Harvard University - Department of Population and International Health

Date Written: January 2011

Abstract

The share of the population aged 60 and over is projected to increase in nearly every country in the world during 2005-2050. Population ageing will tend to lower both labor-force participation and savings rates, thereby raising concerns about a future slowing of economic growth. Our calculations suggest that OECD countries are likely to see modest - but not catastrophic - declines in the rate of economic growth. However, behavioral responses (including greater female labor force participation) and policy reforms (including an increase in the legal age of retirement) can mitigate the economic consequences of an older population. In most non-OECD countries, declining fertility rates will cause labor-force-to-population ratios to rise as the shrinking share of young people will more than offset the skewing of adults toward the older ages. These factors suggest that population ageing will not significantly impede the pace of economic growth in developing countries.

Suggested Citation

Bloom, David E. and Canning, David and Fink, Günther, Implications of Population Aging for Economic Growth (January 2011). NBER Working Paper No. w16705, Available at SSRN: https://ssrn.com/abstract=1748232

David E. Bloom (Contact Author)

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
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617-432-0654 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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David Canning

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
United States

Günther Fink

Harvard University - Department of Population and International Health ( email )

665 Huntington Avenue
Boston, MA 02115
United States

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