Population aging and economic growth in the United States and Japan




Oliver, Mikiko M.

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Over the last several decades, the age distribution of populations has shifted considerably in the United States (US) and Japan, with more people reaching advanced ages than ever before. This change is creating new challenges for policy-makers in terms of its potential detrimental to economic growth. To devise a comprehensive policy for sustainable economic growth, it is important to examine how population composition affects economic change. The objective of this research is to determine how population aging is related to economic change in the US and Japan by applying econometric methods for the time period of 1975 to 2011. The study analyzes the relationship between age and the economy in the US and Japan by applying regression analysis to single-country data, while the majority of previous studies by applying regression have examined the relationship using cross-country data. The results of this study contribute several findings. The major findings are: 1) in the US, the population ages 35 to 44 has the highest positive association with real GDP per capita among the working-age groups analyzed, while in Japan, the population ages 55 to 59 has the highest positive association with real GDP per capita out of the age groups analyzed; 2) in both the US and Japan, an increase in the population aged 75 and over is associated with an increase in economic growth; and 3) in both the US and Japan, the population age groups of 65 to 69 and 70 to 74 are predictors of the real stock index.


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Forecast, Economic forecase, GDP, Japan, Population aging, Public policy, United States