Journal of Population Economics

, Volume 31, Issue 1, pp 135–153 | Cite as

Population age structure and consumption growth: evidence from National Transfer Accounts

  • Michael Kuhn
  • Klaus PrettnerEmail author
Original Paper


We assess the effects of the population age structure and the population dynamics on economic growth. Following recent research, we focus on the generational turnover effect to characterize the influence of birth and death rates, depending on the age profile of individual consumption, the extent of annuity market imperfections, and the willingness of households to shift consumption over time. Using data from the National Transfer Accounts on age profiles of consumption for a number of different countries, we assess—in a comparative way—the sign and the magnitude of the generational turnover effect and its impact on economic growth. We find considerable cross-country differences and trace them back to the underlying variation in demography and in the age structure of consumption.


Demography Economic growth Generational turnover Age structure of consumption National Transfer Accounts 

JEL Classification

E21 J11 O40 



We would like to thank two anonymous referees, Alessandro Cigno, Bernhard Hammer, Dirk Krueger, Alexia Prskawetz, and Miguel Sánchez-Romero for valuable comments and suggestions.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.


  1. Ashraf Q H, Weil D N, Wilde J (2013) The effect of fertility reduction on economic growth. Popul Dev Rev 39:97–130CrossRefGoogle Scholar
  2. Attanasio O P, Weber G (2010) Consumption and saving: models of intertemporal allocation and their implications for public policies. J Econ Lit 48:693–751CrossRefGoogle Scholar
  3. Banz L, Prettner K, Werner K (2014) Endogenous growth and realistic demography. MimeoGoogle Scholar
  4. Blanchard O (1985) Debt, deficits and finite horizons. J Polit Econ 93(2):223–247CrossRefGoogle Scholar
  5. Bloom D E, Canning D (2008) Global demographic change: dimensions and economic significance. Popul Dev Rev 34:17–51Google Scholar
  6. Bloom D E, Canning D, Graham B (2003) Longevity and life-cycle savings. Scand J Econ 105:319–338CrossRefGoogle Scholar
  7. Bloom D E, Canning D, Mansfield R K, Moore M (2007) Demographic change, social security systems, and savings. J Monetary Econ 54:92–114CrossRefGoogle Scholar
  8. Bloom D E, Canning D, Fink G (2010) Implications of population ageing for economic growth. Oxford Rev Econ Pol 26(4):583–612CrossRefGoogle Scholar
  9. Chetty R (2006) A new method of estimating risk aversion. Am Econ Rev 96 (5):1821–1834CrossRefGoogle Scholar
  10. Crespo Cuaresma J, Lutz W, Sanderson W (2014) Is the demographic dividend an education dividend? Demography 51:299–315CrossRefGoogle Scholar
  11. d’Albis H (2007) Demographic structure and capital accumulation. J Econ Theory 132:411–434CrossRefGoogle Scholar
  12. d’Albis H, Augeraud-Véron E (2009) Competitive growth in a life-cycle model: existence and dynamics. Int Econ Rev 50:459–484CrossRefGoogle Scholar
  13. d’Albis H, Moosa D (2015) Generational economics and the national transfer accounts. J Demographic Econ 81(4):409–441CrossRefGoogle Scholar
  14. Erlandsen S, Nymoen R (2008) Consumption and population structure. J Popul Econ 21:505–520CrossRefGoogle Scholar
  15. Fair R C, Dominguez K M (1991) Effects of the changing U.S. age distribution on macroeconomic equations. Am Econ Rev 81:1276–1294Google Scholar
  16. Fernandez-Villaverde J, Krueger D (2007) Consumption over the life cycle: facts from consumer expenditure survey data. Rev Econ Stat 89:552–565CrossRefGoogle Scholar
  17. Guvenen F (2006) Reconciling conflicting evidence on the elasticity of intertemporal substitution: a macroeconomic perspective. J of Monetary Econ 53:1451–1472CrossRefGoogle Scholar
  18. Hansen G D, Imrohoroglu S (2008) Consumption over the life cycle: the role of annuities. Rev Econ Dyn 11:566–583CrossRefGoogle Scholar
  19. Heijdra B J, Ligthart J E (2000) The dynamic macroeconomic effects of tax policy in an overlapping generations model. Oxford Econ Pap 52:677–701CrossRefGoogle Scholar
  20. Heijdra B J, Mierau J O (2012) The individual life-cycle, annuity market imperfections and economic growth. J Econ Dyn Control 36:876–890CrossRefGoogle Scholar
  21. Heijdra B J, Mierau J O, Reijnders L S M (2013) A tragedy of annuitization? Longevity insurance in general equilibrium. Macroecon Dyn 18(7):1607–1634CrossRefGoogle Scholar
  22. Hosseini R (2015) Adverse selection in the annuity market and the role for social security. J Polit Econ 123:941–984CrossRefGoogle Scholar
  23. Human Mortality Database (2014) Human mortality database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at
  24. Kuhn M, Prettner K (2016) Growth and welfare effects of health care in knowledge based economies. J Health Econ 46:100–119CrossRefGoogle Scholar
  25. Kuznets S (1960) Population change and aggregate output. In: National bureau of economic research demographic and economic change in developed countries. Columbia University Press, New YorkGoogle Scholar
  26. Lau S -H P (2009) Demographic structure and capital accumulation: a quantitative assessment. J Econ Dyn Control 33:554–567CrossRefGoogle Scholar
  27. Lee R, Mason A (2010a) Some macroeconomic aspects of global population aging. Demography 47:S151–S172Google Scholar
  28. Lee R, Mason A (2010b) Fertility, human capital, and economic growth over the demographic transitions. Eur J Popul 26:159–182Google Scholar
  29. Lee R, Mason A (2011) Population aging and the generational economy. a global perspective. Edward Elgar, Cheltenham UK and Northampton, MA, USAGoogle Scholar
  30. Lee R., Mason A. (2014) National Transfer Accounts. Website:
  31. Lee R, Mason A, Members of the NTA Network (2014) Is low fertility really a problem? Population aging, dependency, and consumption. Science 346:229–234CrossRefGoogle Scholar
  32. Mason A, Lee R, Jiang J X (2016) Demographic dividends, human capital, and saving. J Econ Ageing 7:106–122CrossRefGoogle Scholar
  33. Mierau J O, Turnovsky S J (2014a) Demography, growth, and inequality. Econ Theor 55:29–68Google Scholar
  34. Mierau J O, Turnovsky S J (2014b) Capital accumulation and the sources of demographic change. J Popul Econ 27:857–894Google Scholar
  35. Prettner K (2013) Population aging and endogenous economic growth. J Popul Econ 26(2):811–834CrossRefGoogle Scholar
  36. Prettner K, Trimborn T (2016) Demographic change and R&D-based economic growth: reconciling theory and evidence. Economica, in pressGoogle Scholar
  37. Prettner K, Bloom D E, Strulik H (2013) Declining fertility and economic well-being: do health and education ride to the rescue. Labour Econ 22:70–79CrossRefGoogle Scholar
  38. Prettner K, Canning D (2014) Increasing life expectancy and optimal retirement in general equilibrium. Econ Theor 56:191–217CrossRefGoogle Scholar
  39. Sánchez-Romero M (2013) The role of demography on per capita output growth and saving rates. J Popul Econ 26:1347–1377CrossRefGoogle Scholar
  40. Sánchez-Romero M, Patxot C, Rentería E, Souto G (2013) On the effects of public and private transfers on capital accumulation: some lessons from the NTA aggregates. J Popul Econ 26:1409–1430CrossRefGoogle Scholar
  41. Sánchez-Romero M, Abio G, Patxot C, Souto G (2016) Contribution of demography to the Spanish economic growth from 1850 to 2000. MimeoGoogle Scholar
  42. Schneider M T, Winkler R (2016) Growth and welfare under endogenous lifetime. Bath Economics Research Papers No. 47/16Google Scholar
  43. Tung A -C (2011) Population aging and the generational economy. A global perspective. In: Lee R, Mason A (eds). Edward Elgar, Cheltenham UK and Northampton, MA, USAGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany 2017

Authors and Affiliations

  1. 1.Wittgenstein Centre (IIASA, VID, WU)Vienna Institute of DemographyViennaAustria
  2. 2.Institute of EconomicsUniversity of HohenheimStuttgartGermany

Personalised recommendations