Rising Longevity, Increasing the Retirement Age, and the Consequences for Knowledge-based Long-run Growth

We assess the long-run growth effects of rising longevity and increasing the retirement age when growth is driven by purposeful research and development. In contrast to economies in which growth depends on learning-by-doing spillovers, raising the retirement age fosters economic growth. How economic growth changes in response to rising life expectancy depends on the retirement response. Employing numerical analysis, we find that the requirement for experiencing a growth stimulus from rising longevity is fulfilled by the USA, nearly met by the average OECD economy, but missed by the European Union and by Japan.