The Determinants of the Macroeconomic Implications of Aging
American Economic Review · 2014 · Volume 104 · Issue 5
Abstract
The aging of the US population undoubtedly will be associated with macroeconomic changes. In particular, some combination of lower consumption growth and increased labor input will ultimately be required. But, the timing of these changes can have important effects on variables like the rate of return to capital and wages. If the adjustment to consumption is slow, which would be the case if budget deficits were allowed to rise significantly as the population ages, then aging is likely to be associated with an increase in the return to capital and a reduction in wages.
Keywords
Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital, Macroeconomics: Consumption, Saving, Wealth, Social Security and Public Pensions, National Deficit, Surplus, Fertility, Family Planning, Child Care, Children, Youth, Economics of the Elderly, Economics of the Handicapped, Non-labor Market Discrimination, Wage Level and Structure, Wage Differentials
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