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Population Aging And The Structure Of Wages

Author

Listed:
  • Robert K. Triest
  • Steven A. Sass
  • Margarita Sapozhnikov

    (Center for Retirement Research)

Abstract

The United States, along with virtually all other developed countries, is on the cusp of a radical transformation of its labor markets. One consequence of demographic change is that there have been substantial shifts in the age distribution of the working age population. The usual historical pattern of a high ratio of younger workers relative to older workers is being replaced by a pattern of roughly equal percentages of workers of different ages. One might expect that the increasing relative supply of older workers would decrease the wage premium paid for older, and more experienced, workers. This paper provides strong empirical support for this hypothesis. Econometric estimates imply that the size of one’s birth cohort affects wages throughout one’s working life, with members of relatively large cohorts earning a significantly lower wage than members of smaller cohorts at all stages of their careers. Our results suggest that cohort size effects are quantitatively important, and should be incorporated into public policy analyses.

Suggested Citation

  • Robert K. Triest & Steven A. Sass & Margarita Sapozhnikov, 2006. "Population Aging And The Structure Of Wages," Working Papers, Center for Retirement Research at Boston College wp2006-5, Center for Retirement Research.
    • Handle: RePEc:crr:crrwps:wp2006-5
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    File URL: http://crr.bc.edu/working-papers/population-aging-labor-demand-and-the-structure-of-wages/
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    Cited by:

    1. Hyeok Jeong & Yong Kim & Iourii Manovskii, 2015. "The Price of Experience," American Economic Review, American Economic Association, vol. 105(2), pages 784-815, February.
    2. Ernesto F. L. Amaral & Daniel S. Hamermesh & Joseph E. Potter & Eduardo L.G. Rios-Neto, 2007. "Demographic Change and the Structure of Wages: A Demand-Theoretic Analysis for Brazil," NBER Working Papers 13533, National Bureau of Economic Research, Inc.
    3. Ernesto Lima Amaral, 2012. "The Decomposition of Economic Outcomes as a Result of Changes in Brazil’s Male Age–Education Structure," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 31(6), pages 883-905, December.
    4. Alicia H. Munnell & Steven A. Sass, 2007. "The Labor Supply of Older Americans," Working Papers, Center for Retirement Research at Boston College wp2007-12, Center for Retirement Research, revised Jun 2007.
    5. Amaral, Ernesto F. L., 2012. "The decomposition of economic outcomes as a result of changes in Brazil’s male age-education structure," OSF Preprints e6v5c, Center for Open Science.

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