Growth and Demographics

Arnold Kling

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Steven Nyce and Syl Schieber analyze the likelihood that the size of the labor force will start to decline in many developed countries.

It now appears that many of the developed economies will experience periods
in which the numbers of non-elderly will decline.

Moreover, in some cases, these declines will exceed the rates of labor productivity growth – implying that societies face the prospect of declining living standards. Coping with the resulting problems will require far more substantial changes in society than has been generally appreciated.

Total output per consumer is equal to total output per worker times the number of workers per consumer. They are worried that with the aging population, the number of workers per consumer will fall too rapidly to maintain total output per consumer.

For Discussion. Given this demographic outlook, is Social Security part of the solution, part of the problem, or essentially irrelevant?

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CATEGORIES: Growth: Causal Factors , Social Security

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Eric writes:

Is this really a problem for the United States? We seem to be able to tolerate very high immigration levels, levels that would cause revolution in Old Europe. Doesn't high levels of immigration mean that we will never have a shortage of workers?

And if there is a shortage of workers, isn't the answer to simply open the immigration gates a little wider?

What about the quality of the immigrants the US recieves compared to Europe? People come to the US because they want to. People go to Germany and France because they have to.

To what extent has high immigration levels extended the life of Socialist Insecurity? I have no idea, but I'd wager that SS is in much better shape than it would be if we didn't accept 5+ million immigrants, legal and illegal, per year.

Posted May 19, 2003 10:25 AM

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