Does human capital compensate for depopulation?

Martina Siskova, Michael Kuhn, Klaus Prettner and Alexia Fürnkranz-Prskawetz

No 2202, VID Working Papers from Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna

Abstract: Fertility rates have been falling persistently over the past 50 years in most developed countries around the world. Simultaneously, the trend in outward migration from poorer to richer countries has been steady. These two forces have contributed to declining population growth and in some countries even to depopulation. In this paper, we quantify the extent to which the negative effect of decreasing fertility on the aggregate human capital stock of a country is compensated for by increasing education and health investments – both of which raise individual human capital. We find that declining fertility is not fully, but partly compensated when including the full set of countries in our regressions. When focusing on depopulation countries, the compensatory effect is substantially weaker and, in many specifications, even insignificant.

Keywords: Human capital; Fertility; Depopulation; International migration; Economic growth; Quality-quantity tradeoff (search for similar items in EconPapers)
Pages: 30 pages
Date: 2022-05
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Persistent link: https://EconPapers.repec.org/RePEc:vid:wpaper:2202

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