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The Economic Consequences of Demographic Change: Its Impact on Growth, Investment and the Capital Stock

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  • Gunther Tichy

    (University of Graz, Austrian Academy of Sciences and Austrian Institute of Economic Research)

Abstract

The traditional debate on the real and financial consequences of ageing is based on two assumptions: a deteriorating old-age dependency ratio and declining productivity of an ageing population. Both suppositions are questionable. Relevant for the future burden is not the old-age dependency ratio but the relation of the working to the non-working part of the population, which will deteriorate only slightly as the number of unemployed and of early pensioners will decline as a consequence of the shrinking working-age population. The productivity of an ageing society may increase even if individual productivity shrinks with ageing: this is a consequence of the increasing disability-free life expectancy and of factor-price induced higher capital intensity. The coming problems of ageing are, therefore, less threatening than suspected in the popular and in parts of the professional literature, especially under some supporting labour market policy.

Suggested Citation

  • Gunther Tichy, 2008. "The Economic Consequences of Demographic Change: Its Impact on Growth, Investment and the Capital Stock," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 5(1), pages 105-128.
    • Handle: RePEc:elg:ejeepi:v:5:y:2008:i:1:p:105-128
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    Cited by:

    1. Gunther Tichy, 2016. "Persistente Strukturprobleme trotz zutreffender Strukturprognosen," WIFO Monatsberichte (monthly reports), WIFO, vol. 89(8), pages 553-571, August.

    More about this item

    Keywords

    demographic change; ageing society; productivity and saving of the elderly;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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