Population Ageing and Sectoral Growth: The Case of the U.K., 2006-2026

Abstract

This paper examines the relationship between age structure and the growth (decline) of product markets. The results are generated by
a methodology that combines demographic and economic information. They are based on life-cycle theory that has a respected tradition in
economics, marketing and gerontology. Empirically, the paper uses the latest family expenditure survey for the U.K. to systematically
evaluate the impacts of population growth and ageing on sector growth and composition of the U.K. economy through the first two decades
of the new millennium. The United Kingdom is a useful country since it is ageing like much of continental Europe, only not as fast, and at the
same time it is not as young as the United States. It therefore represents a nice median between the two cases. Not surprisingly, the results
confirm that population ageing benefits the heath sector and disadvantages the education sector. The results also indicate that the fuel and
power (primarily gas and electricity) sector is a big winner, while the clothing and footwear sector is a big loser in a future ageing population.
The reasons stem from a mixture of physiologically induced occurrences (e.g. as we age we become more sensitive to temperature change) and
to global warming effects that amplify temperature extremes. Interesting results within sectors are presented, as well as the implications that
demographic transitions may have for corporate strategy.