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The Baby Boomers and the Productivity Slowdown

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  • Guillaume Vandenbroucke

Abstract

The entry of baby boomers into the labor market in the 1970s slowed growth for physical and human capital per worker because young workers have little of both. Thus, the baby boom could have contributed to the 1970s productivity slowdown. I build and calibrate a model a la Huggett et al. (2011) with exogenous population and TFP to evaluate this theory. The baby boom accounts for 75% of the slowdown in the period 1964-69, 25% in 1970-74 and 2% in 1975-79. The retiring of baby boomers may cause a 2.8pp decline in productivity growth between 2020 and 2040, ceteris paribus.

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  • Guillaume Vandenbroucke, 2018. "The Baby Boomers and the Productivity Slowdown," Working Papers 2018-37, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:2018-037
    DOI: doi.org/10.20955/wp.2018.037
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    More about this item

    Keywords

    Demography; baby boom; aggregate productivity; productivity slowdown; human capital;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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