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Health, an ageing labour force, and the economy: does health moderate the relationship between population age-structure and economic growth?

Author

Listed:
  • Cylus, Jonathan
  • Al Tayara, Lynn
Abstract
Research often suggests that population ageing will be detrimental for the economy due to increased labour market exits and lost productivity, however the role of population health and disability at older ages is not well established. We estimate the relationship between the size of the older working age population and economic growth across 180 countries from 1990 to 2017 to explore whether a healthy older working age population, as measured by age-specific Years Lived with Disability (YLDs), can moderate the relationship between an ageing labour force and real per capita GDP growth. Using country and year fixed effects models, we find that although an increase in the 55–69 year old share of the total population is associated with a reduction in real per capita GDP growth, the decline in economic growth is moderated if the population at that age is in good health. To demonstrate the magnitude of effects, we present model predicted real per capita GDP growth for a selection of countries from 2020 through 2100 comparing the 2017 country-specific baseline YLD rate to a simulated 5% improvement in YLDs. Our findings demonstrate that economic slowdowns attributable to population ageing are avoidable through policy interventions supporting healthy and active ageing.

Suggested Citation

  • Cylus, Jonathan & Al Tayara, Lynn, 2021. "Health, an ageing labour force, and the economy: does health moderate the relationship between population age-structure and economic growth?," LSE Research Online Documents on Economics 112421, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:112421
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    File URL: http://eprints.lse.ac.uk/112421/
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    References listed on IDEAS

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    More about this item

    Keywords

    economy; health; population ageing;
    All these keywords.

    JEL classification:

    • N0 - Economic History - - General
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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