Uk. Ageing population to make productivity crisis worse
Britain’s productivity crisis risks getting worse because the population is ageing steadily, leaving relatively fewer younger, more dynamic workers who typically innovate more.
Unless drastic action is taken to boost skills and creativity, or to increase the number of young workers, then growth will struggle to pick up, according to new economic research published in the journal of the National Institute of Economic and Social Research.
“The share of young workers impacts the innovation process positively and, as a result, a change in the demographic profile that skews the distribution of the population to the right [older], leads to a decline in innovation activity,” said the paper, written by Yunus Aksoy, Henrique Basso and Ron Smith.
Combined with the impact on savings and investment, this has serious implications for GDP growth.
“If in 2015 the UK had the 1970 age structure, it would have added 0.68 percentage points to the long-run annual growth rate,” according to the paper, titled ‘Medium-run implications of changing demographic structures for the macro-economy’.
The steady aging of the population is also a factor driving interest rates down, the analysts believe.
Read full content here: Telegraph
