Demographic Structure and Comparative Advantages: Theory and Evidence
Journal
Annals of Economics and Finance
Journal Volume
26
Journal Issue
1
Start Page
311
End Page
332
Date Issued
2025-05-01
Author(s)
Yang, Chih-Hai
Abstract
We present a simple model to address how the demographic structure of a country determines trade patterns. A country with a higher ratio of youth in its workforce demonstrates more learning-by-doing capability and is associated with a faster productivity catch-up to a technology frontier country, thereby gaining comparative advantages in more industries and thus higher incomes. This theoretical prediction is supported by cross-country evidence obtained from a system GMM estimation. We find that the age group 25-44 has the largest in uence on productivity catch-up. Moreover, a high quality of human capital among those who study abroad significantly facilitates productivity catch-up.
Subjects
Comparative advantage
Demographic structure
Productivity
Type
journal article