Population Ageing and Economic Growth
Education Policy and Family Policy in a Model of Endogenous Growth
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Beschreibung
We review standard economic growth models concentrating on the relationship between population ageing and economic growth and develop a growth model with endogenous human capital and endogenous fertility. With this model we analyse the effects of education policy and family policy on economic growth. The main result for economic policy is that education policy boosts human capital and thus economic growth only in the short-term (i.e. during the transition phase towards the steady state). To boost economic growth in the long-term (i.e. when the economy has reached its steady state), it is necessary to employ family policy as this increases both the fertility rate and the time individuals spend accumulating human capital. The main result for economic growth theory is that steady state economic growth is not possible when population is ageing. Steady state growth is only possible if the age structure of the population is constant.
1. 1 Motivation and main question of this research A modern society faces two alternatives with regards to its population trend. It can either grow or age. A population which chooses not to grow any more (or which chooses to shrink) will necessarily age. And because of the impossibility of all populations in all countries growing forever, it is likely that every country will face this ageing process at some point in time. Because of this and the importance of economic growth for the well-being of a society, the relationship between an ageing population and economic growth will be relevant for each country. It is already an important and much discussed matter for many. Although population ageing is faced by virtually all industrialised countries, the time frame and the intensity of the process vary. The substantial changes forecasted for the demographic structure of many countries over coming decades have led to substantial research activity aiming to analyse and quantify the effects of these changes on a nation's economic performance. ^ A change in population size and population growth rate can af fect both the demand and supply side of an economy. The extent of the effects, however, is not clear. ^ The structure of a population (for example, regarding distribution of age or gender) may also influence the economic performance of a society.
Autor*in
Sandra Gruescu
Themen in »Population Ageing and Economic Growth«
Age Structure Ageing Fertility Growth Theory Human Capital Lucas New Growth Theory Population Ageing Silver Growth Solow economic growth growth growth model