Prof. Andreas Irmen

Population Aging and Automation

During his visit to Munich, Andreas Irmen will contribute to the research and teaching activities of CESifo with a particular focus on the interaction between automation, demographic change, and economic outcomes.
A central element of his stay will be the delivery of three CES Lectures on the Economics of Automation. These lectures provide an advanced introduction to the fast-growing literature on automation, highlighting both its microeconomic foundations and its macroeconomic implications. Andreas Irmen will discuss the causes and consequences of automation for labor demand, wages, the functional income distribution, and economic growth. A key feature of the course is a systematic comparison between his own approach and the influential framework developed by Daron Acemoglu and Pascual Restrepo.

The lectures also cover recent research linking automation to population aging. This work advances the idea that demographic change affects an economy’s incentives to automate production processes. Through this channel, population aging affects the evolution of aggregate GDP, GDP per capita, and the functional income distribution. Importantly, the analysis emphasizes that the mechanisms and qualitative effects differ markedly between the short run and the long run.

In parallel, Andreas Irmen will pursue research at CESifo on technological change, population aging, and pension systems. This research builds on the stylized fact that hours worked per worker have been declining at a small but persistent exponential rate in many industrialized economies for more than a century. Such trends have important implications for pay-as-you-go pension systems, as a declining labor supply can depress pension benefits over and above the purely demographic effects of aging. The research shows that while pension benefits and wages incomes grow at the same rate in the long run, pensions grow more slowly than wages due to declining hours worked. Quantitative results suggest that ignoring labor supply responses leads to substantial overestimations of pension growth, rates of return of the pension system, and steady-state welfare.

Andreas Irmen is Professor of Economics at the University of Luxembourg, where his research focuses on the economics of technological change and population aging.