Impact of Population Ageing on Asia's Future Growth

Abstract

The demographic dividend that contributed substantially to economic growth in developing Asia in the past is dissipating. Population ageing affects growth through savings, capital accumulation, labor force participation, and total factor productivity. We examined the impact of ageing on those 4 channels in 12 developing Asian economies that collectively make up the bulk of the region's population and output. We then made projections about the effects of demographic change on the economic growth of the 12 from 2011 to 2020 and from 2021 to 2030. Our results indicate that there will be a sizable adverse economic impact where population ageing is more advanced.

Keywords: ageing, growth, labor force, total factor productivity, saving, investment, Asia.