@article{ART002632840},
author={Sang Yeong Joo and Jun Seog Hyun},
title={The Effect of Demographic Changes on the Growth Potential of Korea},
journal={Analyses & Alternatives},
issn={2508-822X},
year={2020},
volume={4},
number={2},
pages={71-102},
doi={10.22931/aanda.2020.4.2.003}
TY - JOUR
AU - Sang Yeong Joo
AU - Jun Seog Hyun
TI - The Effect of Demographic Changes on the Growth Potential of Korea
JO - Analyses & Alternatives
PY - 2020
VL - 4
IS - 2
PB - Korea Consensus Institute
SP - 71
EP - 102
SN - 2508-822X
AB - This study analyzes the effect of demographic changes on economic growth. We use the supply-side output identity to forecast the growth potential of the Korean economy. According to the results, even based on optimistic assumptions and prospects, the economic growth rate is likely to fall drastically starting in 2020. Of course, to maintain growth potential, efforts to increase productivity are necessary. However, given the historical experience of developed countries, it is not clear whether the huge trend of demographic change can be offset by efforts to increase productivity. In the so-called ‘30-50 club’ countries, both labor productivity and growth rate tend to fall after reaching the per capita income of $30,000. The degree of decline in the growth rate is closely related to changes in the working age population and the prime-age workforce. The results are similar when tracking the path of changes in total factor productivities of the economy. When a certain level of income is reached, the increase in total factor productivity also tends to slow down. The ripple effects of rapid changes in demographics will indeed be extensive. The negative impact is likely to be concentrated at a time when the working age population, the prime-age workforce, and the total population shrink simultaneously. Above all, it is necessary to use the government’s fiscal space to block the possibility of a rapid fall in the growth rate. In addition, it is important to continuously implement various reform tasks that should be promoted, such as improving the education system and strengthening the social safety net.
KW - Demographic Changes;Potential Growth;Working Age Population;Prime Age Population
DO - 10.22931/aanda.2020.4.2.003
ER -
Sang Yeong Joo and Jun Seog Hyun. (2020). The Effect of Demographic Changes on the Growth Potential of Korea. Analyses & Alternatives, 4(2), 71-102.
Sang Yeong Joo and Jun Seog Hyun. 2020, "The Effect of Demographic Changes on the Growth Potential of Korea", Analyses & Alternatives, vol.4, no.2 pp.71-102. Available from: doi:10.22931/aanda.2020.4.2.003
Sang Yeong Joo, Jun Seog Hyun "The Effect of Demographic Changes on the Growth Potential of Korea" Analyses & Alternatives 4.2 pp.71-102 (2020) : 71.
Sang Yeong Joo, Jun Seog Hyun. The Effect of Demographic Changes on the Growth Potential of Korea. 2020; 4(2), 71-102. Available from: doi:10.22931/aanda.2020.4.2.003
Sang Yeong Joo and Jun Seog Hyun. "The Effect of Demographic Changes on the Growth Potential of Korea" Analyses & Alternatives 4, no.2 (2020) : 71-102.doi: 10.22931/aanda.2020.4.2.003
Sang Yeong Joo; Jun Seog Hyun. The Effect of Demographic Changes on the Growth Potential of Korea. Analyses & Alternatives, 4(2), 71-102. doi: 10.22931/aanda.2020.4.2.003
Sang Yeong Joo; Jun Seog Hyun. The Effect of Demographic Changes on the Growth Potential of Korea. Analyses & Alternatives. 2020; 4(2) 71-102. doi: 10.22931/aanda.2020.4.2.003
Sang Yeong Joo, Jun Seog Hyun. The Effect of Demographic Changes on the Growth Potential of Korea. 2020; 4(2), 71-102. Available from: doi:10.22931/aanda.2020.4.2.003
Sang Yeong Joo and Jun Seog Hyun. "The Effect of Demographic Changes on the Growth Potential of Korea" Analyses & Alternatives 4, no.2 (2020) : 71-102.doi: 10.22931/aanda.2020.4.2.003
