69th International Atlantic Economic Conference

March 24 - 27, 2010 | Prague, Czech Republic

Assessing the Impact of Ageing on Production and Value Added:  An Interindustry Framework

Saturday, 27 March 2010: 11:55
João Carlos Lopes, Ph.D , Economics, ISEG/UECE - Technical University of Lisbon, Lisbon, Portugal
Paula C. Albuquerque, PhD. , Economics, ISEG/SOCIUS - Technical University of Lisbon, Lisbon, Portugal
The demographic trends in western societies have increased the importance of studying the economic and social consequences of ageing. The main issues have been, among others, the labor market effects, the sustainability of social security systems and long term care. In this paper we address a different research topic, quantifying the sectoral impacts on production and value added of the evolution of consumption patterns associated with the aging of the Portuguese population.
We use the following data obtained from two Portuguese institutions (Instituto Nacional de Estatística, INE and Departamento de Prospectiva e Planeamento, DPP): the Household Survey of Income and Expenditure, 2005/6 (INE); the Input-Output Table of Domestic Flows, 2005 (DPP); the Demographic Projections of the Portuguese Population, 2008-2060 (INE). We also use a “bridge matrix” COICOP-CPA, from the Germany Statistisches Bundesamt for the year 2003, adjusting it to Portuguese data (because INE does not publish such a matrix for Portugal).
After disaggregating the Household column of the Portuguese Input-Output Table in two different age groups (“new” and “old”), and using the demographic projections to 2060, together with the strong hypothesis of constant consumption patterns of both groups, we calculate the plausible changes in the relative importance of industries (production and value added) due to “pure” aging effects. In the near future, we plan to use these results in quantifying the energy and environmental impacts of ageing in Portugal.