Demographic Structure and Comparative Advantages: Theory and Evidence

Chih-Hai Yang () and Chu-Ping Lo ()
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Chih-Hai Yang: Department of Economics, National Central University
Chu-Ping Lo: Department of Agricultural Economics, National Taiwan University

Annals of Economics and Finance, 2025, vol. 26, issue 1, 311-332

Abstract: We present a simple model to address how the demographic structure of a country determines trade patterns. A country with a higher ratio of youth in its workforce demonstrates more learning-by-doing capability and is associated with a faster productivity catch-up to a technology frontier country, thereby gaining comparative advantages in more industries and thus higher incomes. This theoretical prediction is supported by cross-country evidence obtained from a system GMM estimation. We find that the age group 25-44 has the largest influence on productivity catch-up. Moreover, a high quality of human capital among those who study abroad significantly facilitates productivity catch-up.

Keywords: Demographic structure; Productivity; Comparative advantage (search for similar items in EconPapers)
JEL-codes: J21 J24 O33 O47 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2025:v:26:i:1:yanglo

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