Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation

DARON ACEMOGLU & PASCUAL RESTREPO

THE NATIONAL BUREAU OF ECONOMIC RESEARCH

Abstract: Several recent theories emphasize the negative effects of an aging population on economic growth, either because of the lower labor force participation and productivity of older workers or because aging will create an excess of savings over desired investment, leading to secular stagnation. We show that there is no such negative relationship in the data. If anything, countries experiencing more rapid aging have grown more in recent decades. We suggest that this counterintuitive finding might reflect the more rapid adoption of automation technologies in countries undergoing more pronounced demographic changes, and provide evidence and theoretical underpinnings for this argument.