Search

New estimates of economic flows by age combined with population projections show that in the coming decades (1) global GDP growth could be slower by about 1 percentage point per year, declining more sharply than population growth; (2) GDP will shift toward sub-Saharan Africa more than population trends suggest; (3) living standards of working-age adults may be squeezed by high spending on children and seniors; (4) changing population age distribution will raise living standards in many lower-income nations; (5) changing economic life cycles will amplify the economic effects of population aging in many higher income economies; and (6) population aging will likely push public debt, private assets, and perhaps productivity higher. Population change will have profound implications for national, regional, and global economies. Center on the Economics and Demography of Aging/[5P30AGO12839-24]/CEDA/Estados Unidos William and Flora Hewlett Foundation/[2013-9306]//Estados Unidos William and Flora Hewlett Foundation/[2017-4778]//Estados Unidos International Development Research Centre/[107451]/IDRC/Estados Unidos European Union’s Seventh Framework Program/[613247]/FP7/Unión Europea United Nations Development Account/[1617AO]/UNDP/Estados Unidos UCR::Vicerrectoría de Investigación::Unidades de Investigación::Ciencias Sociales::Centro Centroamericano de Población (CCP)

This paper presents a dynamic Overlapping Generations Computable General Equilibrium (OLG-CGE) model of Scotland. The model is used to examine the impact of population ageing on the labour market. More specifically, it is used to evaluate the effects of labour force decline and labour force ageing on key macro-economic variables. The second effect is assumed to operate through age-specific productivity and labour force participation. In the analysis, particular attention is paid to how population ageing impinges on the government expenditure constraint. The basic structure of the model follows in the Auerbach and Kotlikoff tradition. However, the model takes into consideration directly age-specific mortality. This is analogous to “building in†a cohort-component population projection structure to the model, which allows more complex and more realistic demographic scenarios to be considered.

Economy Context Technological changes, along with the globalization of markets, are transforming industrial countries into knowledge-driven economies. This shift has made human capital one of the leading public policy themes. However, existing measures of investment do not allow policymakers to comprehend fully the implications of human capital on economic performance and technological advancement. This paper discusses the elements of a comprehensive definition of human capital and identifies the fundamental differences between human and physical capital. It shows that the main features of human capital and its differences with physical capital have implications for national income acounting, the classification of government expenditures, and the endogenous growth literature.