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Agglomeration Processes in Ageing Societies

    Theresa Grafeneder-Weissteiner, Klaus Prettner

VID Working Papers, pp. 1-28, 2021/12/02

doi: 10.1553/0x003d08ee


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doi:10.1553/0x003d08ee

Abstract

This article investigates agglomeration processes in ageing societies by introducing anoverlapping generation structure into a New Economic Geography model. Whether highereconomic integration leads to spatial concentration of economic activity crucially hinges onthe economies' demographic properties. While population aging as represented by decliningbirth rates strengthens agglomeration processes, declining mortality rates weaken them. This isdue to the fact that we allow for nonconstant population size. In particular, we show thatpopulation growth acts as an important dispersion force that augments the distributionaleffects on agglomeration processes resulting from the turnover of generations.JEL classification: R12, J10, F15, C61

Keywords: Agglomeration, population aging, population