Journal of Business & Economic Policy

Population Aging, Labor Force Participation, and Economic Growth
Yuan-Ho Hsu

Abstract
Population aging leads to shrinking working-age population and increasing the age composition of labor force toward older workers. This paper applies growth accounting framework to evaluate the impacts of population aging on per capita output growth in Taiwan, from 2015-2060. The simulation results show that population aging has adverse impacts on future output growth. The government may take policy measures to combat this unfavorable development in output growth, including encouraging labor force participation, increasing the rate of capital deepening, promoting technological progress, and accepting productive immigrants. This study investigates the effects of these policy measures.

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