Demography, capital accumulation and growth

Europe will be challenged by demographic changes over the next few decades, even under favourable
assumptions about fertility and migration, but the economic eects are not yet fully understood. This
paper studies the eects of population ageing on economic growth, capital deepening and robotisation
in 27 European Union (EU) labour markets. First, we econometrically assess the eects of ageing and
potential labour market shortages on growth. Second, we test the hypothesis of whether ageing leads to
faster adoption of new technologies. We distinguish between various capital asset types, including non-
ICT and ICT capital, tangible and intangible capital and the adoption of robots. The analysis is based on
Eurostat, the European Labour Force Survey (EU-LFS) and International Federation of Robotics (IFR)
data. Results indicate that ageing and demographic changes might result in secular stagnation, which
decelerates the adoption of new technologies.