Demography, capital accumulation and growth

Abstract

Europe will be challenged by demographic changes over the next few decades, even under favourable<br> assumptions about fertility and migration, but the economic eects are not yet fully understood. This<br> paper studies the eects of population ageing on economic growth, capital deepening and robotisation<br> in 27 European Union (EU) labour markets. First, we econometrically assess the eects of ageing and<br> potential labour market shortages on growth. Second, we test the hypothesis of whether ageing leads to<br> faster adoption of new technologies. We distinguish between various capital asset types, including non-<br> ICT and ICT capital, tangible and intangible capital and the adoption of robots. The analysis is based on<br> Eurostat, the European Labour Force Survey (EU-LFS) and International Federation of Robotics (IFR)<br> data. Results indicate that ageing and demographic changes might result in secular stagnation, which<br> decelerates the adoption of new technologies.