Demographics and recent productivity performance: insights from cross-country comparisons

Over the last few decades, countries have experienced quite different patterns of productivity growth. In this paper, we emphasize the role of country level demo-graphics in explaining these differences. In particular, looking over the period 1960-2002, we show that cross-country data support the notion that, starting in the late 1970s, countries went through a period of technological transition that lasted a least until the mid-1990s for the fastest adjusting countries and is still proceeding for the slower adjusting countries. The main claim of the paper is that the country-level rate of labour growth was a key factor driving the speed of adjustment to the new technological paradigm, implying that much of the cross-country difference in economic performance over recent decades can be explained by demographic differences across countries as opposed to the many other factors emphasized in the literature. JEL classification: 033, 041.