The Young, the Old, and the Restless: Demographics and Business Cycle Volatility

Nir Jaimovich and Henry Siu

No 14063, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the consequences of demographic change for business cycle analysis. We find that changes in the age composition of the labor force account for a significant fraction of the variation in business cycle volatility observed in the U.S. and other G7 economies. During the postwar period, these countries experienced dramatic demographic change, although details regarding timing and nature differ from place to place. Using panel-data methods, we exploit this variation to show that the age composition of the workforce has a large and statistically significant effect on cyclical volatility. We conclude by relating these findings to the recent decline in U.S. business cycle volatility. Through simple quantitative accounting exercises, we find that demographic change accounts for approximately one-fifth to one-third of this moderation.

JEL-codes: E0 E3 (search for similar items in EconPapers)
Date: 2008-06
New Economics Papers: this item is included in nep-age, nep-bec and nep-mac
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as Nir Jaimovich & Henry E. Siu, 2009. "The Young, the Old, and the Restless: Demographics and Business Cycle Volatility," American Economic Review, American Economic Association, vol. 99(3), pages 804-26, June.

Downloads: (external link)
http://www.nber.org/papers/w14063.pdf (application/pdf)

Related works:
Journal Article: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2009)
Working Paper: The young, the old, and the restless: demographics and business cycle volatility (2007)
Working Paper: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2007)
Working Paper: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2007)
Working Paper: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:14063

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w14063

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().