1 / 9

EU Enlargement: Economic Growth & Demographic Trends

Explore the impact of EU enlargement on economic growth and demographic trends, focusing on aging populations, low birth rates, and labor force dynamics. Understand the potential benefits and challenges of enlarging the EU and its implications for the future.

reece-davis
Download Presentation

EU Enlargement: Economic Growth & Demographic Trends

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Demographic Trends, EU Enlargementand Economic Growth Zamira Simkins* Walter Park * University of Wisconsin-Superior zsimkins@uwsuper.edu

  2. What is the EU? Candidates: Croatia, Turkey, Macedonia Potential candidates: Albania, Iceland, Montenegro, Bosnia and Herzegovina, Serbia, Kosovo

  3. Why is EU Enlarging? Official explanation: • “Enlargement is helping the EU cope better with the new world economic order” (Joaquin Almunia). • “The EU has achieved far more through its gravitational pull than it could have ever done with a stick or a sward…we risk if we suddenly stop our accession process” (Olli Rehn). Research proposal: Demographic crisis Population ageing + Low birth rates => Declining active labor force + High unemployment + Increasing life expectancy => Potential economic and welfare system crises • Boeri et al (2001): By 2050, key EU-15 countries will have worker-retiree ratio of less than 1 worker per 1 retiree.

  4. Why is EU Enlarging? EU-15 Population pyramid, 2011 EU-25 Population pyramid, 2011 EU-10 Population pyramid, 2011 US Population pyramid, 2011 Age % of population Age % of population

  5. Theoretical Model and Hypothesis (Jones, 2002) Hypothesis:European integration and enlargement help advance economic growth in the EU, thanks to faster technological progress and technology diffusion (δh) and stronger ability of member-countries to collectively balance and diversify individual demographic shocks (δn ,δp , δm , δu)

  6. Empirical Model ( ) g_rgdp_pc Annual real GDP per capita growth (dependent variable) rejuv_rate Rate of labor force rejuvenation retir_rate Rate of labor force retirement migr_rate Rate of labor force migration unempl_rate Rate of ∆ in active LF due to unempl-nt popnosch Percent of total population without schooling ln_avgyrsch Log of average years of schooling in total population innov_index Index of innovativeness ln_diversity Log of ethno-linguistic fractionalization index X_dev , X = rejuv_rate,…ln_diversity

  7. Robust OLS Regression Results: Country Effects Notes: P-values in parentheses. Coefficients statistically significant at 1% ***, 5% **, 10% *.

  8. Robust OLS Regression Results: Union Effects

  9. Conclusion • Enlarging the union can help the EU boost economic growth and sustain its welfare system, but only temporarily. • Policies aimed at reducing unemployment and persuading older workers postpone retirement are more effective long-term solutions.

More Related