Population aging and comparative advantage
By Jie Cai, Andrey Stoyanov
In this paper we show that demographic differences between countries are a source of comparative advantage
in international trade. Since many skills are age-dependent, population aging decreases the relative
supply and increases the relative price of skills which depreciate with age. Thus, industries relying on skills
in which younger workers are relatively more efficient will be more productive in countries with a younger
labor force and less productive in countries with an older population. Building upon the neuroscience
and economics literature, we construct industry-level measures of intensities in various age-dependent
skills and show that population aging leads to specialization in industries which use age-appreciating skills
intensively and erodes comparative advantage in industries for which age-depreciating skills are more
important.
Fuente: SSRN
