Aging: A Synoptic View of Some Economic Implications

Abstract

Significant shifts in the age structure of the New Zealand population are underway. Their principal effect will be felt between 2020 and 2040. The paper documents these changes and compares them with other OECD countries. There will be widespread implications for savings, investment, the current account balance, productivity, the labour market, growth of the economy and public expenditures. The paper provides a brief sketch of each of these areas. Behavioural response parameters estimated from historical data may offer little guide to the future, which will involve age dependency ratios well outside the range previously experienced. Global capital markets will play an important role in the intergenerational transfer of resources.