An Empirical Analysis of Population and Technological Progress

59 Pages·2016·1.598 MB·English

by  Hisakazu Kato (auth.)

SPRINGER BRIEFS IN POPULATION STUDIES
POPULATION STUDIES OF JAPAN
Hisakazu Kato
An Empirical
Analysis of
Population and
Technological
Progress
123
SpringerBriefs in Population Studies
Population Studies of Japan
Editor-in-chief
Toshihiko Hara, Sapporo, Japan
Series editors
Shinji Anzo, Tokyo, Japan
Hisakazu Kato, Tokyo, Japan
Noriko Tsuya, Tokyo, Japan
Toru Suzuki, Tokyo, Japan
Kohei Wada, Tokyo, Japan
Hisashi Inaba, Tokyo, Japan
Minato Nakazawa, Kobe, Japan
The world population is expected to expand by 39.4 % to 9.6 billion in 2060
(UN World Population Prospects, revised 2010). Meanwhile, Japan is expected
toseeitspopulationcontractbynearlyone-thirdto86.7million,anditsproportion
of the elderly (65 years of age and over) will account for no less than 39.9 %
(National Institute of Population and Social Security Research in Japan,
Population Projections for Japan 2012). Japan has entered the post-demographic
transitional phase and will be the fastest shrinking country in the world, followed
byformerEasternblocnations,leadingotherAsiancountriesthatareexperiencing
drastic changes.
A declining population that is rapidly aging impacts a country’s economic
growth,labormarket,pensions,taxation,healthcare,andhousing.Thesocialstruc-
tureandgeographicaldistributioninthecountrywilldrasticallychange,andshort-
term as well as long-term solutions for economic and social consequences of this
trend will be required.
ThisseriesaimstodrawattentiontoJapan’senteringthepost-demographictran-
sition phase and to present cutting-edge research in Japanese population studies. It
willincludecompactmonographsundertheeditorialsupervisionofthePopulation
Association of Japan (PAJ).
ThePAJwasestablishedin1948andorganizesresearcherswithawiderangeof
interestsinpopulationstudiesofJapan.Themajorfieldsare(1)populationstructure
and aging; (2) migration, urbanization, and distribution; (3) fertility; (4) mortality
and morbidity; (5) nuptiality, family, and households; (6) labor force and unem-
ployment; (7) population projection and population policy (including family plan-
ning);and(8)historicaldemography.Since1978,thePAJhasbeenpublishingthe
academic journal Jinkogaku Kenkyu (The Journal of Population Studies), in which
most of the articles are written in Japanese.
Thus,thescopeofthisseriesspanstheentirefieldofpopulationissuesinJapan,
impactsonsocioeconomicchange,andimplicationsforpolicymeasures.Itincludes
population aging, fertility and family formation, household structures, population
health,mortality,humangeographyandregionalpopulation,andcomparativestud-
ies with other countries.
Thisseries will beofgreatinteresttoawiderange ofresearchers inothercoun-
tries confronting a post-demographic transition stage, demographers, population
geographers, sociologists, economists, political scientists, health researchers, and
practitioners across a broad spectrum of social sciences.
More information about this series at http://www.springer.com/series/13101
Hisakazu Kato
An Empirical Analysis
of Population and
Technological Progress
123
Hisakazu Kato
Schoolof Political ScienceandEconomics
MeijiUniversity
Chiyoda-ku, Tokyo
Japan
ISSN 2211-3215 ISSN 2211-3223 (electronic)
SpringerBriefs inPopulation Studies
ISSN 2198-2724 ISSN 2198-2732 (electronic)
Population Studies of Japan
ISBN978-4-431-54958-1 ISBN978-4-431-54959-8 (eBook)
DOI 10.1007/978-4-431-54959-8
LibraryofCongressControlNumber:2015960773
©TheAuthor(s)2016
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Preface
In Japan, we are facing a declining population and an aging society, an unprece-
dentedexperienceformodernhumans.Thephenomenonofpopulationdeclineand
aging is found not only in our country but also in other developed nations. Under
these circumstances, we face the challenge regarding whether we can maintain
sustained economic growth. Historical experience indicates that during the period
ofrapideconomicgrowthofthe1950sand1960s,thelargeyoungerlaborforceand
theirsavingsspurredtheJapaneseeconomy,andthepostwareconomicmiraclewas
realized consequent of these factors. This was referred to as a “demographic
bonus,” and the population factors positively contributed to economic growth.
However, we are apprehensive of the sustainability offuture economic growth by
reason of the opposite situation—population decrease and societal aging is a
“demographic onus.”
For sustainability of economic growth, the pivotal factor is technological pro-
gress.ConsideringthepastexperienceofJapaneseeconomicgrowth,themostvalid
factor is technological progress, which is referred to as total factor productivity
(TFP) in economic terms. As noted above, the declining population is the most
severe problem in Japan, and there is a view that the declining population nega-
tively affects TFP.
There have been numerous prolonged debates regarding the relationship
between populationandtechnological progress.FromtheoldMalthusian modelto
the modern endogenous economic growth models, various theories have been
developed in the context of growth theory and the pioneers of economic devel-
opment research, such as the contribution of Kuznets and Simon to the field. We
briefly summarize these discussions and analyze the relationship between popula-
tion and technological progress empirically in recent years in this study.
Thisstudyisorganizedasfollows:Chapter1reviewstheliteratureregardingthe
relationship between population and technological progress and proposes the
problem that an empirical study should examine. Chapter 2 discusses the impor-
tance of technological progress and economic growth, utilizing the growth
accountingmethodandasimpleempiricalanalysis.InChap.3,thestudywillverify
v
vi Preface
the relationship between the two phenomena through an empirical analysis using
OrganisationforEconomicCooperationandDevelopment(OECD)datafrom1985
to2012.Utilizingtheempiricalanalysis,thestudywillconfirmthatthepopulation
scale and the growth rate positively affect multifactor productivity (MFP).
Acknowledgments
I would like to appreciate editors and reviewers of SpringerBriefs in Population
Studies, Population Studies of Japan, in particular Prof. Toshihiko Hara (Sapporo
City University) and Prof. Kohei Wada (Chuo University). I also would like to
thank the members of Population Association of Japan because I learned a lot of
knowledge from the activities in Population Association of Japan. In addition,
I would like to thank Yutaka Hirachi for editing this book.
vii
Contents
1 Population Growth and Technological Progress—From
a Historical View. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Malthusian Model and Modern Interpretation
of Technological Progress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.1 Malthusian Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.2 Modern Interpretation of Malthusian Model . . . . . . . . . . . 2
1.1.3 Technological Progress in Economics Sense. . . . . . . . . . . 3
1.2 Population Growth and Level of Population . . . . . . . . . . . . . . . . 4
1.2.1 Scale Effect and Technological Progress. . . . . . . . . . . . . . 4
1.2.2 Population and Population Growth (1):
World Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2.3 Population and Population Growth (2): Population
in Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.3 Technological Progress and Economic Growth . . . . . . . . . . . . . . 8
1.3.1 Doubt About Scale Effect. . . . . . . . . . . . . . . . . . . . . . . . 8
1.3.2 Technological Progress and Income. . . . . . . . . . . . . . . . . 10
1.4 Demographic Transition and Economic Growth. . . . . . . . . . . . . . 11
1.4.1 Declining Fertility and Income . . . . . . . . . . . . . . . . . . . . 11
1.4.2 Demographic Transition. . . . . . . . . . . . . . . . . . . . . . . . . 12
1.4.3 Declining Fertility and Economic Growth. . . . . . . . . . . . . 13
1.5 Remarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Appendix 1: Kremer’s Theoretical Model. . . . . . . . . . . . . . . . . . . . . . 15
Appendix 2: Endogenous Growth and Population Literature. . . . . . . . . 17
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2 Population, Economic Growth, and TFP in Developed
Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1 Economic Growth and Growth Accounting. . . . . . . . . . . . . . . . . 22
2.1.1 Economic Growth and Production Factors . . . . . . . . . . . . 22
2.1.2 The Cobb–Douglas Production Function
and Growth Accounting. . . . . . . . . . . . . . . . . . . . . . . . . 23
ix
x Contents
2.2 Growth Accounting in OECD Countries. . . . . . . . . . . . . . . . . . . 24
2.2.1 Data of Technological Progress by OECD . . . . . . . . . . . . 24
2.2.2 Growth Accounting in OECD Countries. . . . . . . . . . . . . . 25
2.2.3 Some Problems Related to Technological Progress
Indicators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.3 Population and Economic Growth . . . . . . . . . . . . . . . . . . . . . . . 29
2.3.1 Population and Economic Growth. . . . . . . . . . . . . . . . . . 29
2.3.2 The Results of Empirical Studies (1) . . . . . . . . . . . . . . . . 30
2.3.3 The Results of Empirical Studies (2) . . . . . . . . . . . . . . . . 33
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3 Theoretical and Empirical Analysis of Population and
Technological Progress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.1 Perspective of Technological Progress and Population
Decreasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.1.1 Population Scale and Technological Progress . . . . . . . . . . 38
3.1.2 Technological Progress Perspective and Decreasing
Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.2 The Theoretical Setting for an Empirical Analysis . . . . . . . . . . . . 41
3.3 Preparation for Empirical Analysis. . . . . . . . . . . . . . . . . . . . . . . 43
3.3.1 Outline of Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.3.2 Estimation by Panel Data Analysis . . . . . . . . . . . . . . . . . 44
3.4 Estimation Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.4.1 General Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.4.2 Ten Large Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Conclusions and Remaining Problems . . . . . . . . . . . . . . . . . . . . . . . . . 51