Is Aging Bad for the Economy? Maybe

Harun Onder and Pierre Pestieau

World Bank - Economic Premise, 2014, issue 144, 1-7

Abstract: The world’s aging population is expected to shape the future of economies across the globe. Without behavioral adaptation by current and future generations, this demographic transformation is likely to slow down economic growth. However, aging will also induce behavioral adjustments in savings and labor force participation. Will these adjustments be large enough to reverse the negative effects of demographic change? The answer depends on a number of conditions. This note suggests that determining whether aging is driven by an increase in longevity or by a decrease in fertility is important for understanding the size and direction of these demographic effects. Moreover, the type of unfunded social security system that exists in the economy could also influence the net effect of aging.

JEL-codes: J1 J2 J6 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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