Date Added: Oct 2009
Population aging is emerging as a major demographic trend in many countries, with potentially important implications for a variety of macroeconomic issues. Notwithstanding these challenges, population aging will likely have a comparatively modest effect on economic growth. Although the changed age distribution would be expected to cause the labor force participation rate to decrease, the ratio of labor force to population will actually increase in most countries. This will occur because the lower youth dependency rate and the increased rate of female labor force participation - both of which may reasonably be expected to follow from the fertility rate declines that are driving population aging - will counterbalance the shifting of adults toward older ages at which labor force participation and savings rates are lower.