Population Council Research that makes a difference

Population Aging, Human Capital Accumulation,
and Productivity Growth

A new book exploring the economic consequences of the aging of the global workforce

NEW YORK, NY (2 April 2008) — Most countries of Europe and many in East Asia have aging workforces, the outcome of decades of low fertility and rising longevity. The process is set to continue, with other countries soon following. A critical question to ask in looking to the world's economic future, therefore, is what effect does this aging trend have on labor productivity—on output per worker. Economic theory provides no clear answer. Although at first sight aging would seem to be damaging to productivity, there are positive effects as well. Younger workers may be better educated, healthier, and more energetic and intellectually agile, but older workers are more experienced and may be more competent managers. Economy-wide outcomes are affected by the flexibility of the labor market—in particular, by institutions and practices that promote or impede substitutability among workers of differing ages. Indirect age-structure effects on productivity also exist, working through capital and product markets, schooling quality, and the pace of innovation. Age-productivity profiles at the level of the individual, firm, and country can be markedly different.

This important but complex area of economic demography is the subject of the studies assembled in Population, Human Capital Accumulation, and Productivity Growth, a new supplement to the Population Council's journal Population and Development Review. Among the topics treated:

• The scale and economic significance of global population aging
• The historical role of human capital in economic growth
• Effects of the supply and demand for labor on age–productivity relationships
• Variation in production and consumption over the human life cycle
• Projecting the future educational distribution of the population
• Productivity effects of the level of inter-age substitutability of labor

Chapters include both theoretical studies and model simulations. Country case materials record the experience thus far in adapting to an older workforce. The authors offer suggestions for future labor market and human capital policies in a fast-aging world (table of contents).

The contributing authors are prominent economists and demographers at American and European universities and research institutes. The editors are Professor Alexia Prskawetz, Vienna University of Technology; Professor David E. Bloom, Harvard School of Public Health; and Dr. Wolfgang Lutz, International Institute for Applied Systems Analysis.

Financial support for the publication was provided by the Vienna Institute of Demography, the International Institute for Applied Systems Analysis, the John D. and Catherine T. MacArthur Foundation, and NIH grants to the East-West Center and Harvard University.

To order this book call +1 212 339 0514; fax +1 212 755 6052; or e-mail publications@popcouncil.org. You may also order this book online.

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About Population and Development Review
Population and Development Review seeks to advance knowledge of the interrelationships between population and socioeconomic development and provides a forum for discussion of related issues of public policy.

About the Population Council
The Population Council confronts critical health and development issues—from stopping the spread of HIV to improving reproductive health and ensuring that young people lead full and productive lives. Through biomedical, social science, and public health research in 50 countries, we work with our partners to deliver solutions that lead to more effective policies, programs, and technologies that improve lives around the world. Established in 1952 and headquartered in New York, the Council is a nongovernmental, nonprofit organization governed by an international board of trustees.

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Media contact
pubinfo@popcouncil.org; +1 212 339 0500