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Is Aging Bad for the Economy? Maybe

Author

Listed:
  • Onder, Harun

    (World Bank)

  • Pestieau, Pierre

    (University of Liege)

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.

Suggested Citation

  • Onder, Harun & Pestieau, Pierre, 2014. "Is Aging Bad for the Economy? Maybe," World Bank - Economic Premise, The World Bank, issue 144, pages 1-7, May.
    • Handle: RePEc:wbk:prmecp:ep144
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    Citations

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    Cited by:

    1. Willem DEVRIENDT & Freddy HEYLEN, 2020. "Macroeconomic and Distributional Effects of Demographic Change in an Open Economy - The Case of Belgium," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 86(1), pages 87-124, March.
    2. Claudio Loser & Jose Fajgenbaum & Harpaul Alberto Kohli & Ieva Vilkelyte, 2017. "How Aging Societies May Affect Global Growth Prospects," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 9(1-3), pages 38-74, January.
    3. Pavel Breinek, 2018. "Problems of Older Workers on the Labour Market," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(4), pages 1073-1084.

    More about this item

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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