On Possible Macro Consequences of Society Aging: Economic and Statistical Analysis on the Basis of National Transfer Accounts

The article discusses research results of socio-economic challenges in modern society using selected international statistics and presented in the format of National Transfer Accounts (NTA) as a follow-up to the author’s prior publications in the journal «Voprosy Statistiki» (Issues 4 and 11 of 2019; Issue 5 of 2020). Introduction to the article rationalizes the subject matter topicality both given the pressing problem of ageing of modern society and in connection with the necessity of practical adoption of National Transfer Accounts in the system of Russian statistics as a coherent derivation and elaboration of the System of National Accounts (SNA), expanding analytical capabilities of statistics. Going into the main part of the article, the author applies statistical methods to explore the key macroeconomic consequences of the global ageing of modern societies. The article provides evidence that macroeconomic challenges and risks to sustainable development emerge primarily in the countries featuring low birth rates, a high share of seniors, and significant levels of government support to the households. The author studies how shifts in the population age distribution translate into changes in consumer spending and incomes. The article presents and analyzes initial findings of the quantitative evaluation of these correlations based on historical data on healthcare expenditures and per capita labor income. The paper identifies the factors and the extent of their impact on how people choose the economic behavior model that ultimately determines the volume and structure of consumption in high inflation economies. Finally, the article lays down a number of conclusions to the following essence: (1) empirical estimates confirm the hypothesis that ageing society presents a heavier «economic burden» for the government finances rather than for the economy as a whole and (2) further advances in macro-statistic work (SNA core sections, National Transfer Accounts, satellite accounts within SNA) become increasingly important for expanding analytical capabilities required to seek for a more effective mechanism to build-up and utilize national resources in the face of population ageing.

1. Denisenko M., Kozlov V. Generational Accounts and Demographic Dividend in Russia. Demographic Review. 2018;5(5):40–63. (In Russ.) Available from: https://doi.org/10.17323/demreview.v5i5.10178.

2. Nazarova A.G., Chernyavsky A.V. Aggregate Transfer Accounts for the Russian Federation: Framework for Construction and Analysis. Voprosy Statistiki. 2019;26(4):32–44. (In Russ.). Available from: https://doi.org/10.34023/2313-6383-2019-26-4-32-44.

3. Nazarova A.G. On Models of Funding the Lifecycle Deficit. Voprosy Statistiki. 2020;27(5):23–35. (In Russ.) Available from: https://doi.org/10.34023/2313-6383-2020-27-5-23-35.

4. Paying for the Past, Providing for the Future: Intergenerational Solidarity. In: OECD Ministerial Meeting on Social Policy, Paris, 2–3 May 2011. OECD Publishing; 2011. 4 p. Available from: https://www.oecd.org/els/public-pensions/47711990.pdf.

5. Piggott J. Population Ageing in Australia – National Policy Challenges and Future Directions. In: Kendig H., McDonald P., Piggott J. Population Ageing and Australia's Future. ANU Press; 2016. Pp. 47–62. Available from: https://www.jstor.org/stable/j.ctt1rqc955.8.

6. Hye-Won Kim E. Division of Domestic Labour and Lowest-Low Fertility in South Korea. Demographic Research. 2017;37:743–768. Available from: https://www.jstor.org/stable/26332211.

7. Barslund M.Ch., von Werder M. Measuring Dependency Ratios Using National Transfer Accounts. Vienna Yearbook of Population Research. 2016;14:155–186. Available from: https://www.jstor.org/stable/10.2307/26506087.

8. Zannella M. Review on Population Aging and the Generational Economy: A Global Prospective by Ronald Lee and Andrew Mason. Genus. 2012;68(1):114–116. Available from: https://www.jstor.org/stable/10.2307/genus.68.1.114.

9. Prskawetz A., Sambt J. Economic Support Ratios and the Demographic Dividend in Europe. Demographic Research. 2014;30:963-1010. Available from: https://www.jstor.org/stable/26348225.

10. Lee R., Lee S-H, Mason А. Charting the Economic Life Cycle. In: Prsakawetz A., Bloom D.E., Lutz W. (eds) Population Aging, Human Capital Accumulation and Productivity Growth, Supplement to Population and Development Review, Vol. 34. Pp. 208–237. Population Council; 2008. Available from: https://www.jstor.org/stable/25434765.

11. Bhorat H. et al. South Africa: Demographic, Employment, and Wage Trends. In: Bhorat H., Tarp F. (eds.) Africa’s Lions: Growth Traps and Opportunities for Six African Economies. Washington, D.C.: Brookings Institution Press; 2016. Pp. 229–270. Available from: https://www.jstor.org/stable/10.7864/j.ctt1hfr23q.10.

12. Sheiner L. The Determinants of the Macroeconomic Implications of Aging. The American Economic Review: Papers and Proceedings. 2014;104(5):218–223. Available from: https://www.jstor.org/stable/42920939.