Work in Progress

"Recent Growth in the EU: The Concerto for the Quality and Quantity of Labour Force"
The demographic structure is becoming older but more educated in the EU. Using detailed data on education attainment and labour force across demographic groups by age and gender, I conducted the growth accounting exercise for per capita GDP growth between 2001 and 2019 in 14 advanced EU countries. Decomposing the (average) 0.75% point annual growth rate, the improvement in the quality of labour acts as the main source of growth, mainly due to the rise in the share of high-skill labour (0.3% point contribution) and the labour force being more experienced (0.29% point contribution), while the increase in labour force participation rate, mainly due to the rising participation by female (0.23% point contribution) and the shift from low- to high-skill labour which also has higher participation rate (0.19% point contribution). The negative impact (-0.30% point) of increasing elderly share is completely offset by the aforementioned sources. Nevertheless, the expansion of education and the rise in female participation will eventually reach an end, which casts doubt on the sustainability of long-run growth, particularly in the EU. 

"The Future of Economic Growth in the Era of Population Ageing"
Population ageing is emerging everywhere. The empirical analysis using EU regional data and predetermined age structure as IV suggests the negative effect of ageing population structure on fertility rate, education attainment of the youth and participation rate of low-skill female. I constructed an overlapping-generation model with extended family structure, in which the endogenous eldercare supplied to grandparents leads to a vicious circle between ageing population and low fertility rate. Once the old-age dependency ratio is too high, policy to raise fertility rate only has limited short-run effect and will take a long time to ready the new steady state, which suggests policy intervention in the early stage.