American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity
American Economic Journal: Macroeconomics
vol. 15,
no. 2, April 2023
(pp. 306–32)
Abstract
Population aging is expected to slow US economic growth. We use variation in the predetermined component of population aging across states to estimate the impact of aging on growth in GDP per capita for 1980–2010. We find that each 10 percent increase in the fraction of the population age 60+ decreased per capita GDP by 5.5 percent. One-third of the reduction arose from slower employment growth; two-thirds due to slower labor productivity growth. Labor compensation and wages also declined in response. Our estimate implies population aging reduced the growth rate in GDP per capita by 0.3 percentage points per year during 1980–2010.Citation
Maestas, Nicole, Kathleen J. Mullen, and David Powell. 2023. "The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity." American Economic Journal: Macroeconomics, 15 (2): 306–32. DOI: 10.1257/mac.20190196Additional Materials
JEL Classification
- E23 Macroeconomics: Production
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- J11 Demographic Trends, Macroeconomic Effects, and Forecasts
- J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
- J31 Wage Level and Structure; Wage Differentials
- O47 Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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