Do old people hurt growth?

A new paper (PDF) claims that ageing populations will hinder growth by both dis-saving and dragging down innovation, thus reducing productivity. Using a VAR model, they relate the age structure to measures of growth, saving, investment, and other macroeconomic variables over the 1990-2007 period. They use those coefficients to predict the effect of demographic change on growth rates in the current decade. The results are dramatic, predicting that an ageing population will knock over a percentage point off some countries’ growth rates.

In a ray of light, this morning’s FT (£) reported a study of over 15,000 German employees that examined the relationship between ageing and productivity. One of the authors is quoted saying:

As workforces age, employers are concerned that productivity will decrease. That is not so. What matters is not chronological age but subjective age.

The research suggests that older people are systematically excluded from training activities, and are relegated to less creative and meaningful work, which renders them less productive. As the workforce ages, that may begin to change. As it changes, the relationship between growth and age structures is likely to weaken.

Dole bludger army?

I see that some Australian TV show host said that New Zealand has the “dole bludger army” for support in the cricket.  Now something about intimate relationships with sheep or cows, or something about little country syndrome, or something about Lord of the Rings, would have been fine – banter is acceptable.  But his statement doesn’t make any sense, and feeds into a stereotype of New Zealanders in Australia that leads to real discrimination.

So why doesn’t the stereotype hold up?  Well for one, Kiwis can’t get the unemployment benefit in Australia – they could pre-2000 but then things changed.  Just check it here.  It is common to see Australian media (and people I run into) complaining both that Kiwi’s are “stealing their jobs” and “stealing their benefits”.  In truth Kiwis are heading over there, without a security net, to work hard to make something of themselves in a larger country – they can’t get the benefits, and the idea of a zero sum set of jobs is just straight incorrect.

Secondly, within both countries there are proportionately fewer people on the dole in New Zealand than in Australia.  New Zealand produces these numbers directly, but I couldn’t find matching Aussie data.  As a result, we can just look at the unemployment rates (given they use matching definitions of what constitutes unemployment):

UR

Sure unemployment went a bit higher recently, due to the deeper recession in NZ – but on average a lower proportion of NZers are unemployed than Aussies are.

And this has occurred with much higher employment rates (% of people over 15 in work) in NZ than in Aussie.

ER

So, out of the population, a larger proportion of NZers are actually working relative to those in Aussie.

So not only was it a stupid, racist, and bigoted call – the data doesn’t even support the TV hosts prejudices.

Note:  The term dole bludger is insulting and degrading in the first place – irrespective of the relative unemployment rate.  Even if NZers could get benefits, and the UR was higher in NZ, this type of attitude towards benefits is pretty dirty.

 

GDP in three different charts

Flipchart Rick has a post up about Andy Haldane’s speech the other day and, like all Haldane’s work, it’s witty and engaging so you should definitely read it. The subject is the recent slowdown in growth in the developed world and it illustrates how different views of the same data can lead to very different conclusions.

Haldane plots the last 3000 years of GDP to show what a recent phenomenon exponential growth is:

screen-shot-2015-02-23-at-18-02-36
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New Zealand’s sexiest economist 2015: Voting

During the nomination round this year I kept hearing the same questions coming up.  Who am I supposed to nominate?  Why would I nominate someone?  How can I mix the ideas of economics and sexiness?

As this is an economics blog the vast majority of these comments came from economists or people with a strong interest in economics.  Now I’m yet to meet a person who “does” economics at either a professional or amateur level whose focus is on money or status.  Instead the interest in economics, and the corresponding study of economics, has come from an interest in understanding the social world – and a desire to understand if there is some way of making it better.

As a result, motivating nominations was easy, all I had to do was tell people to nominate an economist who has helped them to satisfy this desire to understand the world – specifically New Zealand.  What New Zealand economist has offered you insight into the world, and motivated you to dig deeper into your own understanding of the New Zealand economy and society.  That is where economics meets sexy.

With that in mind the nomination process is over.  Now it is down to you, dear reader, to determine which of these 20 economists most closely satisfies your personal definition of sexy – your choices will decide who wins “New Zealand’s Sexiest Economist 2015″ (NZSE15).

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New Zealand’s sexiest economist 2015: Nominations open

It is hard to believe it has already been nearly a year since we have celebrated the work of New Zealand economists with a sexiest economist competition – and nearly two years since the competition kicked off.  However, it has been a year, so we’re doing this all over again.

Last year we introduced a nominations round.  Many people complained that their favourite economist wasn’t in the competition – which I’m guessing is a sign of regret that they didn’t get around to nominating them.

I want everyone to feel that they have had the chance to say “I think this economist does the sexiest economics, and is therefore my sexiest economist“.  As a result, this year I want all of you to take nominations very seriously.  On that note, here are the rules:

  1. The nomination must be for a public facing economist that is involved with New Zealand.  This is defined in more detail here.
  2. You can nominate more than one economist – but I’m still not allowing you to rank economists in the nomination round.
  3. You get an extra 1/4 of a nomination point for the person if you send me an economicsy looking picture of the economist.
  4. You get a FULL extra nomination point for writing a paragraph describing why your economist produces sexy economics.  I am very excited to see what people write.

Nominations will close at 5pm on Thursday the 12th of February (New Zealand time).  Voting will commence at 8am Friday the 13th of February (again, NZT).  This way you will be able to discuss who you are going to vote for with your partner during your Valentines Day dinner on Saturday.

You can nominate people in a number of ways:

Note:  I’m going to reiterate here to keep it classy – the purpose of the competition is to celebrate economists work, not to attack economists.  Let’s objectify the economics not the economists.  I will come down hard on any lewd or insulting comments, with the fire of a thousand economists who are being told that economics isn’t a science – you have been warned.