Impact of Population and Workforce Aging on Economic Growth: Case Study of Taiwan

Wen-Hsin Huang, Yen-Ju Lin and Hsien-Feng Lee ()
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Wen-Hsin Huang: Department of Accounting Information, National Taichung University of Science and Technology, Taichung 400-439, Taiwan
Yen-Ju Lin: Department of Public Finance and Taxation, National Taichung University of Science and Technology, Taichung 400-439, Taiwan

Sustainability, 2019, vol. 11, issue 22, 1-13

Abstract: Taiwan’s population is aging at a fast pace, and its aged society is expected to transition into a hyper-aged society within eight years. Population aging has been a matter of international concern; however, there remain differing views about its economic impact. Thus, this study aims to examine the impact of population and workforce aging on Taiwan using quarterly data from 1981–2017. The empirical results demonstrate that an aging workforce has a significantly positive impact on the rate of economic growth. However, the old-age dependency ratio has a significantly negative effect on economic growth. The empirical findings indicate that human capital is essential for total factor productivity (TFP) growth and that workforce and population aging mainly impact productivity through TFP. Accounting for policy factors, increasing the supply of the eldercare workforce and foreign manpower contribute toward countering the negative impact of an aging population on national economic growth. Policies on retirement, pension systems, health care, and human capital accumulation that target the aged population are discussed, accompanied by policy suggestions.

Keywords: population aging; workforce aging; economic growth; elder care (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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