Long-run macroeconomic consequences of Taiwan's aging labor force: an analysis of policy options

Taiwan is poised to become a super-aged society. We found there exist long-run relationships involving key macroeconomic variables and population age shares. The findings indicate that Taiwan's aggregate production exhibits increasing returns to scale where the quality of labor input is the single most important source of growth. The out-of-sample forecast plots envisage that Taiwan's aging labor force does not necessarily decelerate real GDP growth for at least a decade or more. In particular, there are viable policy measures to curb labor shortages due to the shift in the age structure of the labor force caused by po-pulation aging.(c) 2023 The Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.