The impact of the demographic transition on economic growth in Spain

Concepció Patxot, Universitat de Barcelona
Elisenda Rentería, Centro de Desenvolvimento e Planejamento Regional CEDEPLAR
Miguel Sanchez Romero, University of California, Berkeley
Guadalupe Souto, Universitat Autònoma de Barcelona

Spain experiences one of the fastest aging processes among European countries. Governments are especially worried about aging population, because it arises questions (concerns) about the sustainability of the welfare state and the support of the elderly. Nevertheless, during the demographic transition the so-called first demographic dividend, where the growth rate of producers is higher than that of consumers, ameliorates this concern because there are less dependents and the output per capita increases. In addition to the first demographic dividend, there may be a second demographic dividend, related this time to the accumulation of wealth that arises in response to population aging and increasing longevity. In this study we try to estimate the impact on economic growth of historical and future changes in age structure in Spain, calculating both dividends for the period 1970 to 2050.