Ageing and the Economy
Time for a Debate Based on Evidence
Abstract
Policy discussions about ageing have too long taken for granted the untested proposition that population ageing will create an almost insurmountable economic burden for future generations. This paper first outlines the main claims of the ‘ageing crisis’ literature: ageing reduces labour force participation; increased dependency of non-workers upon workers will reduce future living standards; and future taxpayers will bear the cost of their parents’ and grandparents’ longevity. The paper then critically evaluates the evidence. Using an original model that combines economic and productivity growth with projected labour force participation rates, the paper concludes that the above claims are, at best, vastly exaggerated. Indeed, on reasonable assumptions, the model suggests that the ‘crisis’ claims are a furphy.
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
