Will EU be Less Productive in the Times of Aging Population?

The paper aims to evaluate the impact of aging labour force on productivity, measured as a GDP per person employed and total factor productivity (TFP), in the European Union (EU) countries based on models developed by Calvo-Sotomayor et al. (2019), Poplawski-Ribeiro (2020), Feyrer (2008), and Aiyar and Ebeke (2016). We combine different research methods to address previous criticism and use the most recent data to compare our results with previous trends and draw conclusions about the impact of an aging labour force on productivity. Measuring productivity as a GDP per person employed, the study finds that the aging labour force has a negative and statistically significant effect, which differs between the EU- 15 and EU-13 countries, on productivity. Our evidence is not entirely robust since the negative effect of aging labour force on productivity measured as TFP was not statistically significant.