The Impact of the Age Distribution on Unemployment: Evidence from US States

Bruce Fallick and Christopher Foote

No 22-15, Working Papers from Federal Reserve Bank of Boston

Abstract: Economists have studied the potential effects of shifts in the age distribution on the unemployment rate for more than 50 years. Most of this analysis uses a “shift-share” method, which assumes that the demographic structure has no indirect effects on age-specific unemployment rates. This paper uses state-level data to revisit the influence of the age distribution on unemployment in the United States. We examine demographic effects across the entire age distribution rather than just the youth share of the population—the focus of most previous work—and extend the date range of analysis beyond that which was available for previous research. We find that shifts in the age distribution move the unemployment rate in the direction that a mechanical shift-share model would predict. But these effects are larger than the mechanical model would generate, indicating the presence of amplifying indirect effects of the age distribution on unemployment.

Keywords: age distribution; unemployment; shift-share (search for similar items in EconPapers)
JEL-codes: E24 J21 (search for similar items in EconPapers)
Pages: 56
Date: 2022-10-01
New Economics Papers: this item is included in nep-dem
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Citations: View citations in EconPapers (1)

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Working Paper: The Impact of the Age Distribution on Unemployment: Evidence from US States (2022)
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DOI: 10.29412/res.wp.2022.15

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