Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279345 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10594
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Most industrialized countries today are facing historical demographic changes, paring increasing retirement with a declining labor force. We study the consequences of an increasing pensioner-worker ratio in a macroeconomic framework, which suggests a negative effect on total factor productivity. Using newly collected longitudinal data on pensioners, we quantify this effect by exploiting variation in the pre-determined component of retirement. We find that a 10-point increase in the pensioner-worker ratio decreases factor productivity by 5-6%. The effect is stronger when production is labor intensive and automation potential is low. Economic aging also impedes the creation of innovation at the technological frontier.
Subjects: 
aging
retirement
factor productivity
secular stagnation
demographic transition
JEL: 
C23
C26
D24
J11
J14
O40
Document Type: 
Working Paper
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