Population ageing and intergenerational conflict: a post-Keynesian view

Area of Science:

• Economics
• Demography
• Sociology

Background:

• Developed countries face demographic aging, raising concerns about dependency ratios and potential intergenerational conflict.
• Traditional economic models often assume full resource utilization, influencing analyses of aging's economic impact.
• Post-Keynesian economics posits that unemployment and excess capacity are inherent features of capitalist economies.

Purpose of the Study:

• To reexamine the relationships among demographic aging, dependency burden, and intergenerational conflict.
• To analyze these relationships through a post-Keynesian economic lens, emphasizing underutilized resources.

Main Methods:

• Theoretical analysis based on post-Keynesian economic principles.
• Examination of national income determination processes.
• Focus on developed economies with normal levels of unemployment and excess capacity.

Main Results:

• The Keynesian process of national income determination disconnects population aging from an immediate increase in the dependency burden on income recipients.
• Under conditions of less than full employment, a rising dependency ratio does not necessarily decrease the expenditure share of income recipients or increase their tax rates.
• An overemphasis on intergenerational conflict may misrepresent the actual consequences of population aging.

Conclusions:

• Demographic aging's impact on dependency burdens and intergenerational conflict is contingent on the broader economic context of resource utilization.
• Post-Keynesian theory offers a more nuanced understanding, challenging direct causal links often assumed in simpler models.
• Policy and research should consider the implications of underemployment and excess capacity when evaluating the societal effects of an aging population.