The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Population Ageing

  • David N. Weil
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2460

Abstract

Population ageing is primarily the result of past declines in fertility, which produced a decades-long period in which the ratio of dependents to working-age adults was reduced. Rising old-age dependency in many countries represents the inevitable passing of this ‘demographic dividend’. Societies use three methods to transfer resources to people in dependent age groups: government, family, and personal saving. In developed countries, families are predominant in supporting children, while government is the main source of support for the elderly. The most important means by which ageing will affect aggregate output is the distortion from taxes to fund public pensions.

Keywords

Bequests Capital accumulation Capital–labour ratio Demographic dividend Demography Dependency Family transfers Fertility in developed countries Fertility in developing countries Generational crowding India International capital flows Japan Labour supply Mortality Old-age pensions Optimal saving Payroll taxes Population ageing Retirement Saving Social Security in the United States 
This is a preview of subscription content, log in to check access

Notes

Acknowledgment

I am grateful to Jagadeesh Gokhale for helpful comments.

Bibliography

  1. Abel, A. 2003. The effects of a baby boom on stock prices and capital accumulation in the presence of Social Security. Econometrica 71: 551–578.CrossRefGoogle Scholar
  2. Bloom, D., and J. Williamson. 1998. Demographic transitions and economic miracles in emerging Asia. World Bank Economic Review 12: 419–456.CrossRefGoogle Scholar
  3. Bohn, H. 2005. Will social security and medicare remain viable? In Social security reform: Financial and political issues in international perspective, ed. R. Brooks and A. Razin. Cambridge, UK: Cambridge University Press.Google Scholar
  4. Brooks, R. 2003. Population ageing and global capital flows in a parallel universe. IMF Staff Papers 50(2): 200–221.Google Scholar
  5. Burtless, G. 2006. Cross-national evidence on the burden of age-related public transfers and health benefits. Working Paper No. 2006-6. Center for Retirement Research, Boston College.Google Scholar
  6. Cutler, D., J. Poterba, L. Sheiner, and L. Summers. 1990. An ageing society: Opportunity or challenge? Brookings Papers on Economic Activity 1990(1): 1–73.CrossRefGoogle Scholar
  7. Easterlin, R. 1987. Birth and fortune: The impact of numbers on personal welfare. 2nd ed. Chicago: University of Chicago Press.Google Scholar
  8. Elmendorf, D., and L. Sheiner. 2000. Should America save for its old age? Fiscal policy, population ageing, and national saving. Journal of Economic Perspectives 14(3): 57–74.CrossRefGoogle Scholar
  9. Gokhale, J., and K. Smetters. 2006. Fiscal and generational imbalances: An update. In Tax policy and the economy, volume 20, ed. J. Poterba. Cambridge, MA: MIT Press.Google Scholar
  10. Hock, H., and D. Weil. 2006. The dynamics of age structure, dependency, and consumption. Mimeo/Brown University.Google Scholar
  11. Kotlikoff, L., K. Smetters, and J. Walliser. 2007. Mitigating America’s demographic dilemma by pre-funding social security. Journal of Monetary Economics 54: 247–266.CrossRefGoogle Scholar
  12. Lee, R. 2002. A cross-cultural perspective on intergenerational transfers and the economic life cycle. In Sharing the wealth: Demographic change and economic transfers between generations, ed. A. Mason and G. Tapinos. Oxford: Oxford University Press.Google Scholar
  13. Lim, K.M., and D. Weil. 2003. The baby boom and the stock market boom. Scandinavian Journal of Economics 105(3): 359–378.CrossRefGoogle Scholar
  14. Mason, A., R. Lee, A.C. Tung, M.S. Lai, and T. Miller. 2005. Population ageing and intergenerational transfers: Introducing age into national accounts. Mimeo/University of Hawaii.Google Scholar
  15. McGarry, K., and R. Schoeni. 2002. Social security, economic growth, and the rise of independence of elderly widows in the 20th century. Demography 37: 221–236.CrossRefGoogle Scholar
  16. Poterba, J. 2005. Demographic structure and asset returns. In Social security reform: Financial and political issues in international perspective, ed. R. Brooks and A. Razin. Cambridge, UK: Cambridge University Press.Google Scholar
  17. Prescott, E. 2004. Why do Americans work so much more than Europeans? Federal Reserve Bank of Minneapolis Quarterly Review 28(1): 2–14.Google Scholar
  18. United Nations. 2004. World population prospects: The 2004 revision population database. New York: Population Division, United Nations.Google Scholar
  19. United Nations. 2005. Living arrangements of older persons around the world. New York: Department of Economic and Social Affairs, United Nations.Google Scholar
  20. Weil, D. 1994. The saving of the elderly in micro and macro data. Quarterly Journal of Economics 109: 55–81.CrossRefGoogle Scholar
  21. Weil, D. 1997. The economics of population ageing. In Handbook of population and family economics, ed. M. Rosenzweig and O. Stark. Amsterdam: North-Holland.Google Scholar
  22. Weil, D. 1999. Population growth, dependency, and consumption. American Economic Review 89: 251–255.CrossRefGoogle Scholar
  23. Weil, D. 2005. Economic growth. Boston: Addison-Wesley.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David N. Weil
    • 1
  1. 1.