Working Paper: NBER ID: w22452
Authors: Nicole Maestas; Kathleen J. Mullen; David Powell
Abstract: Population aging is expected to slow U.S. economic growth. We use variation in the predetermined component of population aging across states to estimate the impact of population aging on growth in GDP per capita for 1980-2010. We find that each 10% increase in the fraction of the population ages 60+ decreased per-capita GDP by 5.5%. One-third of the reduction arose from slower employment growth; two-thirds was 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.
Keywords: Population Aging; Economic Growth; Labor Force; Productivity
JEL Codes: J11; J14; J23; J26; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Population aging (J11) | GDP per capita growth (O49) |
| Population aging (J11) | Labor productivity growth (O49) |
| Population aging (J11) | Employment growth (J23) |
| Population aging (J11) | Labor compensation and wages (J31) |
| Population aging (J11) | Output per hour worked (J38) |
| Initial age structure (J11) | Future economic outcomes (E66) |