Резюме

The demographic crisis in Bulgaria, marked by the shrinking population, has significant implications for economic growth. This study examines these effects from 1980 to 2022 through the lens of neoclassical economics and empirical modeling. While the crisis is usually associated with negative consequences, the article reveals a potentially counterintuitive phenomenon: the overestimation of labor productivity, estimated at nearly 60% and caused by the demographic crisis, leads to the so-called “growth illusion”. The article shows that the demographic crisis artificially inflates productivity indicators, thus concealing the poor quality of production and threatening long-term economic stability. The results highlight the need for policies to address the structural challenges of the labor market and the confirmed overestimation of its productivity.