Population Aging and Structural Transformation
We quantify the role of population aging in the structural transformation process. Household-level data from the U.S. show that the fraction of expenditures devoted to services increases with household age. We use a shift-share decomposition and a quantitative model to show that U.S. population aging accounted for about a fifth of the observed increase in the service share in consumption between 1982 and 2016. The contribution of population aging to the rise in the service share is about the same size as the contribution of real income growth, and about half as large as that of changes in relative prices.
We are grateful to the editor (Virgiliu Midrigan), anonymous referees, John Leahy, and workshop participants at several institutions for helpful suggestions. Financial support from the National Science Foundation under grant SES-1628879 is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Javier Cravino & Andrei Levchenko & Marco Rojas, 2022. "Population Aging and Structural Transformation," American Economic Journal: Macroeconomics, vol 14(4), pages 479-498. citation courtesy of