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Population ageing and productivity: A survey with implications for New Zealand

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  • Ross Guest

Abstract

This paper critically evaluates the effects of population ageing on labour productivity with particular reference to New Zealand. A number of potential long-run mechanisms are considered: complementarity of workers by age, age-specific productivity of individuals, new technology discoveries and adoptions, and fertility and human capital investments. Potential short-run channels include the 'second demographic dividend', changes in industry composition, and incentives to seek labour-saving technologies. Simulations tentatively suggest that workers could become more complimentary by age which would boost labour productivity. The magnitude of this effect on living standards could entirely offset the projected 12% fall in the support ratio over the next 40 years. The most effective policies for mitigating the national economic burden of ageing are policies to boost labour participation of older workers and to boost immigration.

Suggested Citation

  • Ross Guest, 2014. "Population ageing and productivity: A survey with implications for New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 48(2), pages 153-168, August.
    • Handle: RePEc:taf:nzecpp:v:48:y:2014:i:2:p:153-168
    DOI: 10.1080/00779954.2013.874397
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    References listed on IDEAS

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    Cited by:

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    2. John Creedy & Grant Scobie, 2017. "Debt projections and fiscal sustainability with feedback effects," New Zealand Economic Papers, Taylor & Francis Journals, vol. 51(3), pages 237-261, September.
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    4. Wen-Yi Chen, 2017. "Demographic structure and monetary policy effectiveness: evidence from Taiwan," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(6), pages 2521-2544, November.

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