Demographic Change in Models of Endogenous Economic Growth. A Survey.

The purpose of this article is to identify the role of population size, population growth and population ageing in models of endogenous economic growth. While in exogenous growth models demographic variables are linked to economic prosperity mainly via the population size, the structure of the workforce, and the capital intensity of workers, endogenous growth models and their successors also allow for interrelationships between demography and technological change. However, most of the existing literature considers only the interrelationships based on population size and its growth rate and does not explicitly account for population ageing. The aim of this paper is (a) to review the role of population size and population growth in the most commonly used economic growth models (with a focus on endogenous economic growth models), (b) discuss models that also allow for population ageing, and (c) sketch out the policy implications of the most commonly used endogenous growth models and compare them to each other.Demographic change, endogenous R&D, economic growth

Demographic change and regional competitiveness: The effects of immigration and ageing

The demographic profile of a region is usually seen as a slowly changing background phenomenon in the analysis of regional competitiveness and regional growth. However, regional demographic change can have a significant impact on regional competitiveness and such change is often more rapid and profound than at the national level. In turn, regional population size, growth, composition and distribution are endogenous to regional economic development. This paper focuses on the impact of population ageing and immigration on aspects of regional competitiveness such as innovation, entrepreneurship and productivity. Immigration and ageing trends have generated huge separate literatures but it is argued here that it is fruitful to consider these trends jointly. Theoretically, there are many channels through which immigration and population ageing can affect regional competitiveness. There is empirical evidence that population ageing reduces regional competitiveness, while immigration – particularly of entrepreneurs and highly skilled workers to metropolitan areas – enhances competitiveness. Much of the available literature is based on smallscale case studies and rigorous econometric research on the impact of demographic change at the regional level is still remarkably rare. Some directions for further research are suggested

Determinants of economic growth: the experts’ view

DYNREG

Demographic Determinants of Savings: Estimating and Interpreting the Aggregate Association in Asia

Life cycle savings is proposed as one explanation for much of the increase in savings and economic growth in Asia. The association between the age composition of a nation's population and its savings rate, observed within 16 Asian countries from 1952 to 1992, is re-estimated here to be less than a quarter the size reported in a seminal study, which assumed lagged savings is exogenous. Specification tests as well as common sense imply, moreover, that lagged savings is likely to be endogenous, and when estimated accordingly there remains no significant dependence of savings on the age composition, measured in several ways. Research should consider lifetime savings as a substitute for children, and model the causes for the decline in fertility which changes the age compositions and could thereby account for savings and growth in Asia.Life Cycle Savings, Aging, Asian Growth, Demographic Transition

Measuring the economic impact of immigration: A scoping paper

This discussion paper has three objectives. Firstly, it provides a brief review of recent international empirical research on the labour market impact of immigration. The synthesis of this literature is facilitated by reference to the results from a recent meta-analysis of the impact of immigration on wages. Secondly, the paper briefly reviews international research on other dimensions of the economic impact of immigration, namely productivity and technical change, trade and international relations, the fiscal impact, socio-economic impacts and externalities, and economy-wide (general equilibrium) effects. The approach adopted in considering each of these impacts is to identify the main issues associated with the particular impact, followed by key international references and, where available, New Zealand references on the particular type of impact. The gaps in NZ research are then identified along with any difficulties with the data available for replicating the international studies in New Zealand. Thirdly, the paper seeks to identify feasible (in terms of data availability) suggestions for further research that would add to our knowledge of the economic impact of immigration in New Zealand

The economic and demographic transition, mortality, and comparative development

We propose a unified growth theory to investigate the mechanics generating the economic and demographic transition, and the role of mortality differences for comparative development. The framework can replicate the quantitative patterns in historical time series data and in contemporaneous cross-country panel data, including the bi-modal distribution of the endogenous variables across countries. The results suggest that differences in extrinsic mortality might explain a substantial part of the observed differences in the timing of the take-off across countries and the worldwide density distribution of the main variables of interest

Macroeconomic and policy implications of population aging in Brazil

This paper analyzes the macroeconomic implications of population aging in Brazil. Three alternative yet complementary methodologies are adopted, and depending on policy responses to the fiscal implications of aging, there are two main findings: First, saving rates could increase and not necessarily fall as a consequence of aging in Brazil -- thus contradicting conventional views. Second, lifetime wealth across generations could increase -- as capital deepening generates a second demographic dividend. Two policy responses to aging are emphasized: First, a structural policy response of linking mandatory retirement (or entitlement) ages to increasing life expectancy would boost labor supply and reduce the fiscal costs of aging. Second, in terms of preferable parametric policy responses, the second demographic dividend will be promoted to the highest extent by keeping taxes and debt unchanged while allowing public pensions to adjust downward. Such a policy response would keep pensions from further crowding out private saving -- thus balancing capital accumulation with intergenerational income distribution. In conclusion, Brazil will not necessarily experience a fall in saving and growth, but if government policies are appropriately, adequately, and timely formulated, population aging is likely to lead to substantial capital deepening and increases in lifetime income, wealth, and welfare.Emerging Markets,Access to Finance,Population Policies,Economic Theory&Research,Debt Markets