Working Paper: NBER ID: w2501
Authors: Phillip B. Levine; Olivia S. Mitchell
Abstract: This paper assesses the impact of the post WWII baby boom on relative wages, when this baby boom cohort becomes the oldest segment of the workforce. Time series data are used to estimate a model of the demand for workers in eight age/sex groupings. Using these estimates, we simulate relative wages in the year 2020 assuming the age/sex composition of the workforce behaves according to projections. The results are used to examine the baby boom's potential impact on wages of older, prime-age, and teenage workers, as well as the anticipated wage gap between males and females.
Keywords: baby boom; relative wages; labor market; demographics; wage gap
JEL Codes: J31; J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Demographic changes due to the baby boom (J11) | Decrease in relative wages of prime-age workers (J39) |
| Graying workforce (J26) | Negative effect on teenage workers' wages (F66) |
| Graying workforce (J26) | Implications for teenage workers' human capital investment and future earnings potential (J24) |
| Changing age structure (J11) | Effect on the female-male wage gap (J79) |
| Demographic changes (J11) | Need for social policies to encourage early retirement for workers aged 55 and above (J26) |