MPIDR Working Paper

Youth dependency and total factor productivity

Kögel, T.
MPIDR Working Paper WP-2001-030, 45 pages.
Rostock, Max-Planck-Institut für demografische Forschung (September 2001)
Revised November 2003


Recent literature shows empirical support for an effect of demographic age 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. Much of the recent literature on economic growth has stressed that an understanding of cross-country differences in output per worker is needed. That literature argues that the most important determinant of international differences in output per worker is differences in total factor productivity. This paper finds empirical evidence in cross-country data for the thesis that the youth dependency ratio (the population below working age divided by the population of working age) reduces ´residual´ growth, which measures total factor productivity growth. For this reason, the paper demonstrates that age structure has an effect on the most important determinant of international differences in output per worker.
Schlagwörter: dependency ratio, developing countries, economic growth, young population
Das Max-Planck-Institut für demografische Forschung (MPIDR) in Rostock ist eines der international führenden Zentren für Bevölkerungswissenschaft. Es gehört zur Max-Planck-Gesellschaft, einer der weltweit renommiertesten Forschungsgemeinschaften.