Abstract

This article investigates the consequences of population aging for long-run economic growth
perspectives. We introduce age specific heterogeneity of households into a model of technological
change. We show that the framework incorporates two standard specifications as special cases:
endogenous growth models with scale effects and semiendogenous growth models without scale
effects. The introduction of an age structured population implies that aggregate laws of motion for
capital and consumption have to be obtained by integrating over different cohorts. It is analytically
shown that these laws of motion depend on the underlying demographic assumptions. Our results are
that (i) increases in longevity have positive effects on per capita output growth, (ii) decreases in fertility
have negative effects on per capita output growth, (iii) the longevity effect dominates the fertility effect
in case of endogenous growth models and (iv) population aging fosters long run-growth in endogenous
growth models, while the converse holds true in semi-endogenous growth frameworks.