Nonlinear Effects of Population Aging on Economic Growth

Using the panel data consisting of 142 countries for the period between 1960 and 2014, the authors assessed the nonlinear effects of population aging on economic growth. They found that population aging negatively affects economic growth only when it reaches a certain high level and its negative effects grow stronger as population aging deepens. They also underscored that population aging has hampered economic growth, during the period of more recent years, especially in developed countries where population aging is quite advanced. This finding suggests that due to the dramatically accelerating population aging in the coming decades, the world, particularly the developed world, may face the challenge of sustaining growth.​