Review of Development Economics
Regular Article

The Impact of Ageing and the Speed of Ageing on the Economic Growth of Least Developed, Emerging and Developed Countries, 1990–2013

Aurora A. C. Teixeira

Corresponding Author

E-mail address: ateixeira@fep.up.pt

Centre for Economics and Finance, University of Porto (CEF.UP), Faculdade de Economia, Universidade do Porto, Rua Dr Roberto Frias, 4200‐464 Porto, Portugal

Tel: +351‐9614‐56128; E‐mail:

ateixeira@fep.up.pt

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N. Renuga Nagarajan

CEF.UP, Faculdade de Economia, Universidade do Porto, Porto, Portugal

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Sandra T. Silva

CEF.UP, Faculdade de Economia, Universidade do Porto, Porto, Portugal

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First published: 29 November 2016
Cited by: 5
Also affiliated to the Institute for Systems and Computer Engineering, Technology and Science (INESC) at the Faculty of Engineering and the Observatório de Economia e Gestão de Fraude (OBEGEF) at the University of Porto.
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Abstract

Studies relating ageing and countries’ economic performance address mostly developed economies. However, extant studies demonstrate that less developed countries (LDC) and emerging economies (EE) are reaching the transition process faster than those from developed regions, which renders the speed of ageing, besides ageing, a critical variable to explore in this context. Comparing system dynamic panel data estimations for 40 LDC, 19 EE and 28 developed countries (DC), between 1990 and 2013, we uncovered that ageing is detrimental to countries’ economic growth, with noticeable nuances depending on countries’ development level. The current level of ageing significantly and negatively impacts on DC's growth but not on that of LDC or EE. For these latter groups, the most relevant issue is the speed of ageing. The current annual growth of old age dependency ratio significantly diminishes EE's growth prospects whereas the lagged annual growth of the ageing index and the old age dependency ratio significantly curtails LDC's growth. Such results emphasize the need for urgent public policies that might mitigate the imbalance in LDCs’ age structure before the speed of ageing leads LDCs to become even much poorer.

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