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Long-run macroeconomic consequences of Taiwan's aging labor force: an analysis of policy options
Institution:1. Centre for Policy Research & International Studies, Universiti Sains Malaysia, Malaysia;2. Sunway Business School, Sunway University, 47500, Selangor, Malaysia;3. Department of Economics, University of Colorado Boulder, USA;4. Department of Urban Industrial Management and Marketing, University of Taipei, Taiwan;1. Newcastle Business School, University of Newcastle, Australia;2. Centre for African Research, Engagement and Partnerships (CARE-P), University of Newcastle, Australia;3. Bond Business School, Bond University, Gold Coast, Australia;4. Centre for Data Analytics, Bond University, Gold Coast, Australia;5. Department of Economics, Shahjalal University of Science and Technology, Bangladesh;1. Western Galilee College, Department of Economics, Israel;2. University College London, Cancer Institute, Department of Cancer Biology, United Kingdom;1. LEAD, Université de Toulon, France;2. Université Côte d′Azur, CNRS, GREDEG, France;3. Banque de France, 31 rue Croix des Petits Champs, 75049, Paris cedex, France;1. Department of Economics, University of Bern, Switzerland;2. Department of Economic and Social Sciences, Università Politecnica delle Marche, Ancona, Italy;3. Department of Economics and Law, Sapienza University of Rome (Italy) and Department of Economics, University of Antwerp, Belgium;4. Department of Economics and Finance, Luiss Guido Carli, Rome, Italy
Abstract:Taiwan is poised to become a super-aged society. We found there exist long-run relationships involving key macroeconomic variables and population age shares. The findings indicate that Taiwan's aggregate production exhibits increasing returns to scale where the quality of labor input is the single most important source of growth. The out-of-sample forecast plots envisage that Taiwan's aging labor force does not necessarily decelerate real GDP growth for at least a decade or more. In particular, there are viable policy measures to curb labor shortages due to the shift in the age structure of the labor force caused by population aging.
Keywords:Taiwan  Aging  Conditional ARDL  Quality of labor
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