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

Population aging is expected to slow US economic growth. We use variation in the predetermined component of population across states estimate impact on growth GDP per capita for 1980–2010. find that each 10 percent increase fraction age 60+ decreased by 5.5 percent. One-third reduction arose from slower employment growth; two-thirds due labor productivity Labor compensation and wages also declined response. Our implies reduced rate 0.3 percentage points year during (JEL E23, E24, J11, J14, J31, O47)