| This paper examines whether there is any linkage between high levels of sovereign debt and the size of the elderly population. One might expect, based on precepts of prudent management of finances, that nations with large populations of elderly would have lower sovereign debt relative to GDP. However, our results show that the opposite appears to be more prevalent among OECD nations. We find a positive and significant correlation between the percentage of people 65 and older and the sovereign debt/GDP ratio. On the other hand, there is no significant relationship among non-OECD countries which are generally less developed. |
Updated 03/19/2014