The Economic Growth Consequences of Population Aging in Sweden

The economic growth consequences of population aging in Sweden- 2-Population aging, early retirements and postponed labor entry may have profound effects on the economic growth in Sweden during the forthcoming decades. This study examines the economic growth consequences that may occur in the future if not preventive measures soon are considered. An extended and modified version of the well known Solow model has been used to analyze these effects. The results indicate that the government tax rate will have risen to 103 % in year 2050, due to this population aging scenario. Implicitly, substantial changes need to be pursued by the Swedish government in order to cope with this aging challenge. The model is based upon theoretical grounds and it is not tested with actual data, therefore all th