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The Consequences of Working Age Population Decline on Economic Growth
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
2024 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The working age population has been declining in several high income countries for the past few decades. This thesis examines the effect of the decline of the working age population on economic growth, specifically in the form of the growth rate of gross domestic product (GDP) per capita. It investigates whether there is a difference in the effect of changes in the growth rate of the working age population on GDP per capita growth rates between countries with shrinking working age populations and those with growing working age populations. To conduct this study a Solow Growth model framework is adopted. The growth rate of capital per worker, total factor productivity (TFP), and the labour force participation rate are included in the model as independent variables. The data consists of panel data from 1993 to 2022 for two subsamples consisting of countries that have experienced working age population decline, or working age population growth respectively. A fixed effects regression method is applied, including specifications with country fixed effects, time fixed effects, and country and time fixed effects. The results indicate some evidence of a negative association of a negative working age population growth rate on the GDP per capita growth rate. However, the other model specifications do not produce significant evidence for these results. There is evidence that the positive growth rate of the working age population has a positive effect on the growth rate of GDP per capita for countries with a growing working age population.

Place, publisher, year, edition, pages
2024.
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-226217OAI: oai:DiVA.org:umu-226217DiVA, id: diva2:1870113
Available from: 2024-06-14 Created: 2024-06-14 Last updated: 2024-06-14Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf