Growth and Longevity from the Industrial Revolution to the Future of an Aging Society

Thomas Lindh, Institute for Futures Studies
Bo Malmberg, Stockholm University
David de la Croix, Université Catholique de Louvain

The paper compares two radically different methods to evaluate how age structure and life expectancy may have contributed to the historical evolution of GDP per capita in Sweden. One method is based on simulation of a theoretical model mapping population structure and survival functions into income growth through an education mechanism. This model is calibrated on Swedish population data back to the 18th century. The other model, based on the same variables is estimated on post-war global data (111 countries, 45 annual observations). The estimation results show that increasing life expectancy prolongs the positive effects of increasing shares of the population in working ages. The estimated relationship is used to backcast income growth in Sweden back to the Industrial Revolution. The path of the simulation model falls well within the 95% confidence interval of the backcast, which in turn tracks the Maddison GDP/cap estimates back to around 1870.

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Presented in Session 38: The Macroeconomics of Population Aging: International Comparisons