Age Dependency and Labour Productivity Divergence

Posted: 11 Nov 2018

See all articles by Misbah Tanveer Choudhry

Misbah Tanveer Choudhry

Centre for Research on Economic Empowerment of South Asian Women (CREESAW)

Enrico Marelli

University of Brescia

Marcello Signorelli

University of Perugia - Department of Economics

Date Written: 2016

Abstract

This study finds strong empirical evidence in favour of the hypothesis that the age composition of population matters for labour productivity growth. We applied the fixed effects panel model using data on a large number of countries over the period 1980–2010. Our results suggest that higher age dependency not only directly impacts negatively on labour productivity but also modifies the impact of other determinants of labour productivity. Child dependency has a more adverse effect on labour productivity than old age dependency. We specifically find that the marginal effects of gross capital formation, information and communication improvement, and labour market reforms are significant at lower levels of age dependency. However, the marginal effect of savings on labour productivity is high at a high level of age dependency. The impact of age dependency varies between developed and developing economies. Diversity in the size and nature of age dependency across regions and different income groups help to explain the labour productivity differential across them.

Keywords: Labour productivity growth; age dependency; panel fixed effects

JEL Classification: C22; C23; O47

Suggested Citation

Choudhry, Misbah Tanveer and Marelli, Enrico Piero and Signorelli, Marcello, Age Dependency and Labour Productivity Divergence (2016). Applied Economics, Vol. 48, No. 50, 2016, Available at SSRN: https://ssrn.com/abstract=3269959

Misbah Tanveer Choudhry (Contact Author)

Centre for Research on Economic Empowerment of South Asian Women (CREESAW) ( email )

157-Bradley Road
Luton
London, Bedfordshire LU40AR
United Kingdom

HOME PAGE: http://www.creesaw.org

Enrico Piero Marelli

University of Brescia ( email )

Department of Economics and Management
Via San Faustino 74B
Brescia, BS 25122
Italy
0302988828 (Phone)

Marcello Signorelli

University of Perugia - Department of Economics ( email )

via Pascoli, 20
PG 06123 Perugia, 06123
Italy

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