Abstract

In many countries, national population shrinkage is impending, which is mirrored by increasing attention in public and academic debates. The economic literature has recently started to focus on the effects of population decline, but many questions remain unanswered. This also applies to the effects of population decline on the capital stock, determined by investment decisions of firms. The question whether the looming shrinkage of one production factor, labor, may already be a drag on the other, is of crucial importance. In this project, we anayze the effects of experienced and expected regional working-age population decline on firm investments.