New Age Thinking: Alternative Ways of Measuring Age, Their Relationship to Labor Force Participation, Goverment Policies and GDP
AbstractThe current practice of measuring age as years-since-birth, both in common practice and in the law, rather than alternative measures reflecting a person's stage in the lifecycle distorts important behavior such as retirement, saving, and the discussion of dependency ratios. Two alternative measures of age are explored: mortality risk and remaining life expectancy. With these alternative measures, the huge wave of elderly forecast for the first half of this century doesn't look like a huge wave at all. By conventional 65+ standards, the fraction of the population that is elderly will grow by about 66 percent. However, the fraction of the population that is above a mortality rate that corresponds to 65+ today will grow by only 20 percent. Needless to say, the aging of the society is a lot less dramatic with the alternative mortality-based age measures. In a separate application of age measurement, I examine the consequences of stabilizing labor force participation by age with alternative age definitions. If labor force participation were to remain as it is today with respect to remaining life expectancy (i.e. if the length of retirement stayed where it is today) rather than labor force participation remaining fixed by conventionally-defined age, then there would be 9.6 percent more total labor supply by 2050 in the U.S. This additional labor supply could help finance entitlement programs amongst other things. GDP would be between seven and ten percent higher by 2050 if retirement lengths stabilize. Several policies are examined that would encourage longer work careers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13476.
Date of creation: Oct 2007
Date of revision:
Note: AG PE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- J10 - Labor and Demographic Economics - - Demographic Economics - - - General
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David M. Cutler & Louise Sheiner, 1999.
"Demographics and medical care spending: standard and non-standard effects,"
Finance and Economics Discussion Series
1999-20, Board of Governors of the Federal Reserve System (U.S.).
- David M. Cutler & Louise Sheiner, 1998. "Demographics and Medical Care Spending: Standard and Non-Standard Effects," NBER Working Papers 6866, National Bureau of Economic Research, Inc.
- Gopi Shah Goda & John B. Shoven & Sita Nataraj Slavov, 2009.
"Removing the Disincentives in Social Security for Long Careers,"
in: Social Security Policy in a Changing Environment, pages 21-38
National Bureau of Economic Research, Inc.
- Gopi Shah Goda & John B. Shoven & Sita Nataraj Slavov, 2007. "Removing the Disincentives in Social Security for Long Careers," NBER Working Papers 13110, National Bureau of Economic Research, Inc.
- Victor R. Fuchs, 1984. ""Though Much is Taken" -- Reflections on Aging, Health, and Medical Care," NBER Working Papers 1269, National Bureau of Economic Research, Inc.
- Lans Bovenberg & Theo Nijman, 2009. "Developments in pension reform: the case of Dutch stand-alone collective pension schemes," International Tax and Public Finance, Springer, vol. 16(4), pages 443-467, August.
- Marcel Boyer & Sebastien Boyer, . "The Main Challenge of Our Times: A Population Growing Younger," e-briefs 161, C.D. Howe Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.