EFFECTS OF DEMOGRAPHIC STRUCTURE IN GROWTH ACCOUNTING AND LABOUR MARKET DECOMPOSITIONS

Abstract

The impact of demographic structure on the labor market and macroeconomic aggregates may be pronounced in some countries. Despite this fact, only a handful of approaches dealing with the quantification of such effects have been developed so far. The aim of this paper is therefore to fill this methodological gap and to introduce approaches for capturing changes in demographic structure, with applications in growth accounting and labor market decompositions. First, a novel additive decomposition is presented as an alternative to traditional models using fixed population weights. This is followed by the presentation of a multiplicative decomposition, which can be applied to various growth accounting exercises based on multiplicative identities.

Data:
Received: 18 Sep 2021
Revised: 31 Oct 2021
Accepted: 6 Dec 2021
Published: 20 Dec 2021