{"id":3450,"date":"2016-08-26T19:44:24","date_gmt":"2016-08-26T23:44:24","guid":{"rendered":"http:\/\/162.223.13.186\/~zacksim\/will-an-aging-population-hurt-economic-growth\/"},"modified":"2022-02-26T13:20:54","modified_gmt":"2022-02-26T13:20:54","slug":"will-an-aging-population-hurt-economic-growth","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/will-an-aging-population-hurt-economic-growth\/","title":{"rendered":"Will an Aging Population Hurt Economic Growth?"},"content":{"rendered":"

Is the American population aging too fast? With rising life expectancy and declining birth rates, the bell curve is certainly shifting\u2014and fast. People age 60 and over are becoming an increasingly large percentage of the total population, a trend that\u2019s expected to persist into the coming decades. By 2040, 60+ individuals could make up more than a quarter of the American population, as suggested by U.S. Census Bureau\u2019s projections.<\/p>\n

2016-08-30_-_Aging_Population_-_Image_1_of_7.pngSource: Compilation by Administration on Aging (U.S Department of Health and Human Services) using Census data<\/strong><\/em><\/span><\/p>\n

2016-08-30_-_Aging_Population_-_Image_2_of_7.png<\/strong><\/em>Source: World Bank<\/em><\/strong><\/span><\/p>\n

2016-08-30_-_Aging_Population_-_Image_3_of_7.png\u00a0Source: US Census Bureau<\/strong><\/em><\/span><\/p>\n

It’s clear from these graphics that this trend is not based strictly on gueswork – there are real forces at work. Based on 1980-2010 data, research estimates that a +10% increase in the fraction of 60+ population could contract GDP per capita growth by -5.5%, including a -1.7% decline in growth rate of workers per capita and a -3.7% reduction in GDP per worker (i.e. produdctivity) growth\u00a0(according to the National Bureau of Economic Research).<\/p>\n

Never Too Old to Go to Work<\/strong><\/p>\n

On the other hand, even as many baby boomers\u2019 retirement lowers the overall labor force participation, an increasing number of older Americans have been willing to work past their so-called \u2018prime years,\u2019 bucking the general labor force participation trend.What\u2019s more, the elderly\u2019s participation is pulling down the unemployment rate for them as a category.<\/p>\n

2016-08-30_-_Aging_Population_-_Image_4_of_7.png<\/p>\n

Source: Bureau of Labor Statistics<\/strong><\/em><\/span><\/p>\n

2016-08-30_-_Aging_Population_-_Image_5_of_7.pngSource: Bureau of Labor Statistics<\/em><\/em><\/strong><\/span><\/p>\n

The Bureau of Labor Statistics projection (released December 2015) for the 2014-2024 period indicates that the addition to 65-74 year-olds in the labor supply pool would be the most among all age groups. 75+ year-olds would also have the fastest average annual growth rate in the labor force, at +6.4%.<\/p>\n

2016-08-30_-_Aging_Population_-_Image_6_of_7.pngSource: Bureau of Labor Statistics<\/strong><\/em><\/span><\/p>\n

2016-08-30_-_Aging_Population_-_Image_7_of_7.png<\/strong><\/em>Source: Bureau of Labor Statistics<\/em><\/em><\/strong><\/span><\/p>\n

Bottom Line for Investors<\/strong><\/p>\n

The link between an aging population and economic output is relevant, but given the possibility that the older generation is increasingly working longer may mute its impact on overall growth. Also, the recent proliferation of working options, including those requiring less physical exertion and more knowledge\/cognitive skills, as well as flexibility in work location and hours should help older people find suitable jobs.<\/p>\n

It\u2019s also important to note that a boost in productivity does not solely hinge on a worker\u2019s age. Technological advancement has been the driver of long-term economic growth for centuries. Therefore, as far as progress in productivity is concerned, innovation and education are probably more important ultimately than a population\u2019s age composition.<\/p>\n

 <\/p>\n

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Is the American population aging too fast? With rising life expectancy and declining birth rates, the bell curve is certainly […]<\/p>\n","protected":false},"author":1,"featured_media":4124,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[55,71,72],"tags":[],"class_list":["post-3450","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-outlook","category-private-client-group","category-steady-investor-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=3450"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3450\/revisions"}],"predecessor-version":[{"id":11219,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/3450\/revisions\/11219"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=3450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=3450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=3450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}