Demography, Labor Quality and Total Factor Productivity
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| Title | Demography, Labor Quality and Total Factor Productivity
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| Author | Yi Zhen and Zhu Chao |
| Organization | The School of Finance, Capital University of Economics and Business |
| Email | yizhen2010@126.com，chao_zhu@126.com |
| Key Words | Demography; Labor Quality; Total Factor Productivity |
| Abstract | The role of population demographics in economic development is one of the oldest themes in economics. Recent literature provides empirical support for an effect of demographic structure on economic growth. This literature does not give attention to the possibility that age structure might also have an effect on total factor productivity (TFP). This paper characterizes the behavior of economic participant decision-making based on multi-sector dynamic general equilibrium model (DGE), and finds that demography has a significant impact on TFP. Using 170 countries 1960-2014 panel data, the authors test the relationship between demographics and TFP. The results suggest a statistically significant positive correlation between the fraction of the population aged 45 or elder and TFP, while the cohort aged 0 to 25 has a negative effect. This paper contributes to literature on identifying and verifying the labor quality as the channel through which the population age structure influences TFP. This finding is robust when the sample is restricted to 1851-1950 specific historical episodes. |
| Serial Number | WP1254 |
| Time | 2018-01-12 |
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