It has been argued that demographics is one of the main headwinds for future growth in especially the more advanced economies, such as many of the European economies and the US. Indeed, between 2005 and 2050 the share of population over 60 is expected to rise not only in the more advanced economies, but in nearly every country in the world. Researchers have already looked into how changes in the size and the composition of an economy's population influence macroeconomic outcomes. They have identified channels through which demographic changes affect an economy on top of those mentioned above: savings and investment behavior, labour market decisions and aggregate demand and supply responses. Equally important are the potential effects on public sector finance. Increases in e.g. health and retirement expenses, and more generally future entitlements raise issues of sustainability of public sector finances.