Policy Briefing Population Aging and the Economy
Questions/Calculations that need to be answered/done:
- According to Canadian Census estimates of population, how much did the proportion of those aged 65 and above grow between the 2001 and the 2016 Census? Using our historical average function for population projections, what share of Canada’s population in 2031 is projected to be 65 and above?
- Using again our historical averages function for population projections, how is Canada’s Old-Age Dependency ratio projected to change, holding labour force participation rates constant at their 2016 level, between the 2016 and 2031 Census? Over the same timeframe, how much will the Economic Dependency Ratio change? In words, what do the Old-Age and Economic Dependency ratios say?
Assume the labour force participation rate (r_x) increases by 5 percent per year between 2016 and 2026 for the aged 60 and above population. Using the Laspeyres Index, compare GDP per capita in 2021 & 2026 to 2016 holding other factors constant (i.e., the employment rate, e_x, and average hours worked, h_x). Do this calculation separately assuming a u-shaped, flat and kinked age-productivity profile. What is the implication of the age-productivity profile in and aging population and how does it affect the Laspeyres index?