Abstract
The United States is in the midst of a demographic transition toward a population age structure with a higher fraction of elderly individuals. The associated growth of transfer programs for which the elderly represent most of the beneficiaries, such as Social Security and Medicare, will place upward pressure on the size of the public sector. The rising number of individuals who are beyond the traditional age of retirement, relative to the number of individuals of traditional working age, will create incentives for longer working lives and for greater investments in human capital by younger workers. Changing age structure may also affect rates of return available to savers, although these effects are likely to be modest.
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Additional information
Based on a presentation in the NBER Panel on Economic Implications of Demographic Change at the NABE Annual Meeting, October 11, 2015.
*James Poterba is the Mitsui Professor of Economics at MIT and the President of the National Bureau of Economic Research. He has served as President of the National Tax Association and the Eastern Economic Association, and as vice president of the American Economic Association. His research focuses on taxation, savings, and portfolio behavior. Between 2010 and 2012, he served as a member of the National Research Council Committee on the Long-Run Macro-Economic Effects of the Aging U.S. Population. In addition to his academic interest in retirement savings, he is also a trustee of the College Retirement Equity Fund (CREF) and the TIAA-CREF mutual funds. He received his undergraduate degree from Harvard College and a D.Phil. from Oxford University.
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Poterba, J. Economic Implications of Demographic Change. Bus Econ 51, 3–7 (2016). https://doi.org/10.1057/be.2016.5
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DOI: https://doi.org/10.1057/be.2016.5