The Relationship Between Population Aging and Economic Growth: An Empirical Analysis of Canada, Japan and France

Fri., Apr. 1, 2022 2:30 p.m.

Location: Online (Zoom)

Speaker: Alfred Adenuga, Economics Honours Student, University of Regina

Date: Friday, April 1, 2022

Time: 2:30 PM Saskatchewan

Join Zoom Meeting: https://uregina-ca.zoom.us/j/96276009276

Title: The Relationship Between Population Aging and Economic Growth: An Empirical Analysis of Canada, Japan & France

Abstract:

Many countries in the world are currently facing significant aging of their population, a trend that is expected to continue for generations to come. Unlike most phenomena, population aging is relatively new, and we are yet to completely grasp the effects on the economy; population aging leads to visible changes in a country that will continue well into the future. Economic growth is something most countries strive towards, and demographic factors could be significant determinants of the pace and trajectory of economic growth. Economic theory suggests that a country’s economic growth is a function of the amount of labor and capital available. With this in mind, it would imply, theoretically, that population aging would negatively affect the amount of labor available in the economy thus negatively affecting economic growth. However, from an empirical perspective, decomposing the effects of population aging can be challenging to estimate. This study provides a scoping review of the literature that identifies, reports, and summarizes the existing academic empirical literature covering the different estimation methods of calculating the effect of population aging on economic growth. To identify the relationship between population aging and economic growth, this paper uses Autoregressive Distributed Lag (ARDL) models of data for Canada, France, and Japan. In addition, the ARDL bounds test approach is used to test for a levels relationship between the variables of interest. The analysis covers data for the period from 1961-2019 for Canada and France, and 1970-2019 for Japan. The results show that the effect of population aging, as measured by the share of the elderly in population, could be positive or negative depending on the modelling environment. The results of the F-bounds test suggests that the variables of interest have a levels relationship which identifies a long-run equilibrium in Japan and France.

All Faculty, Staff, Students and Visitors are welcome.

Omid Mirzaei, PhD

Assistant Professor

Department of Economics

University of Regina

Omid.Mirzaei@uregina.ca