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

Nicole Maestas, Kathleen Mullen and David Powell

No 22452, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: J11 J14 J23 J26 O47 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-age, nep-gro and nep-lma
Note: AG EFG LS PE PR
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Citations: View citations in EconPapers (131)

Published as Nicole Maestas & Kathleen J. Mullen & David Powell, 2023. "The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity," American Economic Journal: Macroeconomics, vol 15(2), pages 306-332.

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Journal Article: The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity (2023)
Working Paper: The Effect of Population Aging on Economic Growth, the Labor Force and Productivity (2016)
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