In this paper, we addressed the important question of how selected areas of life will be affected as populations grow older and smaller. We used the case of Germany, a country that is at a relatively advanced stage of the demographic transition, to study the potential long-run implications of population aging. In the decades prior to 2040, the consequences of population aging are expected to be largely negative, as the baby boomers reach retirement age and dependency ratios and expenditures for pensions and health care increase. Still, we found evidence that after a period of transition, population aging could have effects that are positive, at least in part.
We have shown the potential effects of having an older and smaller population, such as lower carbon emission levels due to changes in aggregate consumption patterns. Having a higher share of the population with tertiary education could be beneficial for economic growth in the long run, and could compensate, at least in part, for absolute and relative declines in the number of economically active persons. Inherited wealth will have to be split among a smaller number of siblings, which could compensate for an increase in upward public transfers, via pay-as-you-go pension system. Furthermore, individuals are expected to spend longer shares of their lives in good health and engage in leisure activities.
Chosen excerpts by Job Market Monitor. Read the whole story at The Advantages of Demographic Change after the Wave: Fewer and Older, but Healthier, Greener, and More Productive?
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