DEPOPULATION ECONOMY: STRUCTURAL TRANSFORMATION

Abstract

The article examines structural transformation patterns in economies experiencing sustained demographic decline. Demographic decline, understood as a long-term reduction in population caused by excess mortality over births and/or persistent negative net migration, is interpreted as a fundamental driver of structural economic change. Unlike cyclical downturns, it reshapes labour supply, compresses domestic demand, alters investment priorities, and increases fiscal pressure through pension and healthcare systems. The study is based on a comparative analysis of Japan, Germany, Spain, Poland, and Latvia during 1995-2023. Three phases of structural adjustment are identified: demographic anxiety, structural rupture, and stabilisation of a new type. The first phase is characterised by structural inertia and emerging labour shortages. The second involves deep intersectoral reallocation, including the decline of construction and mass retail alongside the expansion of healthcare, digital services, financial intermediation, and automated manufacturing. The third phase reflects a new equilibrium characterised by high capital intensity, technological saturation, and the growing role of the silver economy. Empirical analysis confirms several stable cross-country patterns: healthcare and digital sectors demonstrate persistent growth, while construction appears the most vulnerable sector under demographic contraction. A statistically significant inverse relationship between population growth and industrial robot density across OECD countries supports the hypothesis that labour scarcity stimulates automation and technological modernisation. The article proposes a conceptual model of the depopulation economy (DE-model), distinguishing sectors-drivers of growth, stabilisers, and sectors of structural contraction. Automation is identified as the key mechanism linking demographic decline with sectoral restructuring. The findings are applied to Ukraine, where demographic decline is intensified by war-related migration and human losses. The study substantiates the risk of a structural trap arising from post-war reconstruction based on labour-intensive development models inconsistent with the country’s demographic potential.