Demographic change, technological advance, and growth: A cross-country analysis

Cyn Young Park, Kwanho Shin, Aiko Kikkawa

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

Population aging presents major policy challenges across the world. However, the impact on economic growth of this demographic trend remains unclear. This paper empirically investigates the impact of population aging on economic growth by considering changes in the entire age distribution of populations of over 170 countries. We find that a rise in older people as a percentage of the general population, alongside a shrinking working-age population, lowers economic growth. We also investigate the effect of technological advances on the relation between population aging and economic growth, using four plausible proxies of technological advancement: life expectancy, labor productivity, automation (robots), and total factor productivity. The analysis suggests that increasing life expectancy, total factor productivity and labor productivity help older age groups contribute more positively to future growth. More automation also benefits old age groups by reducing the old age disadvantage, therefore slowing the decline in their productivity.

Original languageEnglish
Article number105742
JournalEconomic Modelling
Volume108
DOIs
Publication statusPublished - 2022 Mar

Bibliographical note

Funding Information:
In accordance with Elsevier policy and my ethical obligation as a researcher, I am reporting that I receive funding from Asian Development Bank. I have disclosed those interests fully to Elsevier, and I have in place an approved plan for managing any potential conflicts arising from that involvement.

Publisher Copyright:
© 2022 Elsevier B.V.

Keywords

  • Demographic change
  • Growth
  • Labor productivity
  • Life expectancy
  • Robotics

ASJC Scopus subject areas

  • Economics and Econometrics

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