France - Germany : Is there a demographic dividend?
Abstract
Although an ageing population is primarily good news, since it means that people are living longer, frequently it is also depicted as an economic and social burden. It affects productive capacity (loss in productivity and decline in the workforce) and reduces per capita income (increase in the in active population). It can also lead to greater social spending on behalf of older people (retirement, health and dependence), and taxation to finance these programmes can seriously undermine incentives to produce wealth. Logically, Germany should be hit by more pronounced ageing than what is seen in France. However, it is not a foregone conclusion that France will reap a demographic dividend. While population trends point to a bright future for France, recent economic developments have nevertheless tended to be very favourable to the German economy, while France is mired in mass unemployment and low growth.
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