Global Demographic Change: Dimensions and Economic Significance

45 Pages Posted: 19 Oct 2004 Last revised: 24 Jul 2010

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

Date Written: October 2004

Abstract

Transitions from high mortality and fertility to low mortality and fertility can be beneficial to economies as large baby boom cohorts enter the workforce and save for retirement, while rising longevity has perhaps increased both the incentive to invest in education and to save for retirement. We present estimates of a model of economic growth that highlights the positive effects of demographic change during 1960-95. We also show how Ireland benefited from lower fertility in the form of higher labor supply per capita and how Taiwan benefited through increased savings rates. We emphasize, however, that the realization of the potential benefits associated with the demographic transition appears to be dependent on institutions and policies, requiring the productive employment of the potential workers and savings the transition generates. Economic projections based on an "accounting" approach that assumes constant age-specific behavior are likely to be seriously misleading.

Suggested Citation

Bloom, David E. and Canning, David, Global Demographic Change: Dimensions and Economic Significance (October 2004). NBER Working Paper No. w10817, Available at SSRN: https://ssrn.com/abstract=601119

David E. Bloom (Contact Author)

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

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National Bureau of Economic Research (NBER)

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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

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