Demographic Obstacles to European Growth

46 Pages Posted: 3 Dec 2019

See all articles by Thomas F. Cooley

Thomas F. Cooley

New York University - Leonard N. Stern School of Business; National Bureau of Economic Research (NBER)

Espen Henriksen

Department of Financial Economics, BI Norwegian Business School

Charlie Nusbaum

University of California, Santa Barbara (UCSB) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 2019

Abstract

Since the early 1990’s the growth rates of the four largest European economies—France, Germany, Italy, and the United Kingdom—have slowed. This persistent slowdown suggests a low-frequency structural change is at work. A combination of longer individual life expectancies and declining fertility have led to gradually ageing populations. Demographic change affects economic growth directly through households savings and labor supply decisions and also growth indirectly through the pension systems and the need to fund them. Tax increases to balance budgets will impose additional distortions to individual factor-supply choices. We quantify the growth effects from aging and from the financing of public pensions, and we estimate the welfare gains from pension reforms.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Cooley, Thomas F. and Henriksen, Espen and Nusbaum, Charlie, Demographic Obstacles to European Growth (November 2019). NBER Working Paper No. w26503. Available at SSRN: https://ssrn.com/abstract=3496480

Thomas F. Cooley (Contact Author)

New York University - Leonard N. Stern School of Business ( email )

44 West Fourth Street, 7-180
Room 7-85
New York, NY 10012
United States
212-998-0870 (Phone)
212-995-4218 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Computer Research Center
Cambridge, MA 02138
United States

Espen Henriksen

Department of Financial Economics, BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Charlie Nusbaum

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

Santa Barbara, CA

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
5
Abstract Views
80
PlumX Metrics