This paper examines the effects of demographic dynamics on the measured rates of economic growth. The presence of strong demographic dynamics affects the measurements of the differences in economic performance both across countries and over time. Having better measures of economic growth is extremely important for improving our understanding in this area and has direct policy applications. This paper attempts to improve the empirics of economic growth by taking full account of the effect that demographic dynamics have on economic growth. The methodology used in this paper is unique in that it relies on macro rather than micro data.
The principal result of this paper is the construction of a panel data base covering 119 countries for the period 1960-85 that includes measures of economic growth that are free of demographic effects. Other significant findings include a function that describes how productivity of labor varies with age and a panel data base of average effective labor supply per person, covering both past and future periods, up to the year 2025.