The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity

Nicole Maestas, Kathleen Mullen and David Powell

American Economic Journal: Macroeconomics, 2023, vol. 15, issue 2, 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.

JEL-codes: E23 E24 J11 J14 J31 O47 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (29)

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Related works:
Working Paper: The Effect of Population Aging on Economic Growth, the Labor Force and Productivity (2016)
Working Paper: The Effect of Population Aging on Economic Growth, the Labor Force and Productivity (2016)
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DOI: 10.1257/mac.20190196

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