Aksoy, Yunus (2025) Aging populations, labour productivity and technology. In: Zimmermann, K.F. (ed.) Handbook of Labor, Human Resources and Population Economics. Springer Nature. ISBN 9783319573656. (In Press)
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Abstract
This paper explores how demographic aging—marked by declining fertility and increasing life expectancy—shapes labor productivity through its interaction with technological progress. Building on Simon Kuznets’ early insights, which highlight the vital role of younger cohorts in driving innovation and economic dynamism, the paper reviews a growing body of evidence showing that aging alters the structural conditions necessary for sustained productivity growth. While aging may initially encourage capital deepening and automation as firms respond to labor scarcity, these gains are short-lived. Over time, the shrinking share of young, skilled, and mobile workers undermines innovation, reduces technology adoption capacity, and slows total factor productivity (TFP) growth. The analysis further connects these dynamics to Hansen’s secular stagnation hypothesis, arguing that demographic forces contribute to chronic underinvestment, weak demand, and subdued technological diffusion. Although aging economies may adopt more automation technologies, such as robotics, this reflects a narrow and reactive form of innovation rather than the broad-based technological advances that historically fueled productivity gains. The paper also highlights how aging reduces business dynamism and constrains human capital accumulation, weakening the absorptive capacity needed for complex, skill-intensive technologies. Without institutional reforms to support lifelong learning, entrepreneurship, and inclusive innovation, demographic aging threatens to become a structural drag on productivity. In sum, the paper positions aging not merely as a demographic shift but as a transformative force that reshapes the labor-technology-productivity nexus, underscoring the need for forward-looking policies to sustain growth in aging societies.
Metadata
| Item Type: | Book Section |
|---|---|
| School: | Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School |
| Research Centres and Institutes: | Applied Macroeconomics, Birkbeck Centre for |
| Depositing User: | Yunus Aksoy |
| Date Deposited: | 16 Sep 2025 15:22 |
| Last Modified: | 18 Sep 2025 16:14 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/56154 |
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