Impact of Population Aging on Poland’s Long-Term Economic Growth until 2050

Abstract

A number of demographic processes are ongoing that are bound to exert a far-reaching impact on economic activity through multifarious channels. These vital processes, which are largely exogenous to economic growth, should be perceived as a driving force of long-run socioeconomic development. The article deals with the main long-term macroeconomic consequences of population aging, chiefly its impact on economic prosperity as measured by GDP per capita in Poland until 2050. The starting point of the analysis is a macro-identity linking GDP per capita with various factors of production related to demographic indicators. Using a long-term demographic projection by Poland’s Central Statistical Office, an attempt is made to quantify the effects of demographic changes on the economy. The study employs quantitative methods such as econometric models, shift share and general equilibrium. The analysis finds that the demographic structure of Polish society will exert a diversified impact on GDP per capita. Initially, for about 15 years, this impact will be conducive to growth, but from the 2030 s onward it is likely to impede growth.

Keywords

• gdp per capita decomposition
• demographic conditions of growth
• population aging