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I feel like you're using that equation in a bit backwards way. If suddenly, everyone between the ages of 0 and 5 vanished, it would have a huge effect on the po

I feel like you're using that equation in a bit backwards way. If suddenly, everyone between the ages of 0 and 5 vanished, it would have a huge effect on the population, but at first take, zero effect on the GDP since presumably that age group is not involved in production. With a second approximation, you might say that GDP would increase since parental childcare is not part of the GDP and those parents could instead be adding to the GDP. Similarly, the current flatlining (ignoring the decrease due to excess deaths) of the population won't effect actual production until a couple of decades on, unless you count possibly increased production described above.

mywittyname 5y ago
Parents of 0 to 5 year olds spend an assload of money on them.
dragonwriter 5y ago
> If suddenly, everyone between the ages of 0 and 5 vanished, it would have a huge effect on the population, but at first take, zero effect on the GDP since presumably that age group is not involved in production. That age group is involved in production (e.g., in media.) But not lot, so, yes, the narrow first-order GDP effect would be very small. > With a second approximation, you might say that GDP would increase since parental childcare is not part of the GDP and those parents could instead be adding to the GDP. I suspect second order demand side effects would probably be more strongly negative that second order supply side effects would be positive. You can't predict GDP effects from labor supply side effects alone.
slv77 5y ago
Lower birth rates initially boost economies because it increases the percentage of the working age population which can drive a virtuous cycle in terms of savings and investment. In economics this is called the demographic dividend which if well managed can lift countries out of economic poverty. Eventually though the benefit disappears as the demographic pyramid becomes a pipe and the share of working population shrinks again. The US demographic dividend was the era of the baby boomers who were a large cohort but had relatively few children.

mywittyname 5y ago

Parents of 0 to 5 year olds spend an assload of money on them.

dragonwriter 5y ago

> If suddenly, everyone between the ages of 0 and 5 vanished, it would have a huge effect on the population, but at first take, zero effect on the GDP since presumably that age group is not involved in production. That age group is involved in production (e.g., in media.) But not lot, so, yes, the narrow first-order GDP effect would be very small. > With a second approximation, you might say that GDP would increase since parental childcare is not part of the GDP and those parents could instead be adding to the GDP. I suspect second order demand side effects would probably be more strongly negative that second order supply side effects would be positive. You can't predict GDP effects from labor supply side effects alone.

slv77 5y ago

Lower birth rates initially boost economies because it increases the percentage of the working age population which can drive a virtuous cycle in terms of savings and investment. In economics this is called the demographic dividend which if well managed can lift countries out of economic poverty. Eventually though the benefit disappears as the demographic pyramid becomes a pipe and the share of working population shrinks again. The US demographic dividend was the era of the baby boomers who were a large cohort but had relatively few children.