Declining Population and Sustained Economic Growth: Can They Coexist?

Though a declining population and labor force would suggest lower economic growth, the constraint by itself would stimulate efficiency-augmenting technological changes by tightening labor and capital resource constraints. Also, as a result of changes and reforms in the labor market, socioeconomic fo...

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Bibliographic Details
Published in:The American economic review 1998-05, Vol.88 (2), p.412-416
Main Authors: Kosai, Yutaka, Saito, Jun, Yashiro, Naohiro
Format: Article
Language:English
Subjects:
Child rearing
Cost analysis
Decades
Demographics
Depopulation
Economic development
Economic efficiency
Economic growth
Economic models
Economic theory
Efficiency
Employment
Endowment
Female fertility
Fertility
Fertility rate
Fertility rates
Forecasting Japan's Future: The Lessons of History
GDP
Gross Domestic Product
Human capital
Labor force
Labor market
Labor productivity
Labour market
Macroeconomics
Maternity & paternity leaves
Men
Opportunity costs
Population
Production factors
Self employment
Studies
Technological change
Wage differentials
Wages & salaries
Women
Workforce
Working women
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Summary:Though a declining population and labor force would suggest lower economic growth, the constraint by itself would stimulate efficiency-augmenting technological changes by tightening labor and capital resource constraints. Also, as a result of changes and reforms in the labor market, socioeconomic forces can work to mitigate the decline in fertility. This paper discusses Japan's growth prospects in the 21st century focusing on the endogenous mechanism countering the declining population, and draws lessons from the historical experiences of Japan as well as other countries.
ISSN:0002-8282
1944-7981