International asymmetries in population aging and their consequences for the technology gap and global growth

Ryoji Ohdoi

No 302, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper studies how international asymmetries in population aging shape cross-country technology gaps and global growth. I develop a two-country, two-sector overlapping-generations model with endogenous technological progress free from scale effects. The analysis shows that, in the long-run equilibrium, the faster-aging country's relative technology declines through two mechanisms: reduced per capita labor supply and a reallocation of employment toward the non-tradable sector. Consequently, policies aimed solely at increasing labor-force participation are insufficient to prevent such relative technological decline, because the latter mechanism persists. Numerical simulations confirm these mechanisms and reveal potentially non-monotonic effects on global growth under large demographic asymmetries. I also quantify Japan's relative technological decline due solely to differential aging by calibrating the two countries to Japan and the United States.

Keywords: International asymmetries in population aging; Overlapping generations; Endogenous technological progress without scale effects; Non-tradable goods; Sectoral reallocation (search for similar items in EconPapers)
JEL-codes: F43 J11 O30 O41 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2025-12
New Economics Papers: this item is included in nep-age, nep-dge, nep-lab and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:302

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