Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307421 
Year of Publication: 
2024
Series/Report no.: 
Discussion paper No. 168
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
This paper investigates the impact of population ageing on the economic and fiscal performance of Finland, a small open economy, which has undergone a rapid and significant demographic shift since 2010. By employing the Synthetic Control Method (SCM) to create a counterfactual scenario without ageing while also controlling for a major part of structural changes in the industrial and business environments, we find that in 2019, Finland's real GDP per capita would have been 15.9% to 27.5% higher, productivity 8.4% to 13.9% higher, and general government debt 26.0 to 28.4 percentage points lower. Our findings are further validated by an instrumental variable approach, which supports the SCM results.
Subjects: 
Macroeconomic Policy
Macroeconomic Aspects of Public Finance
Fiscal Policy
Studies of Particular Policy Episodes
Demographic Economics
JEL: 
E6
E61
E62
E65
J1
Document Type: 
Working Paper

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