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American Economic Journal:
Macroeconomics

ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)

Population Aging and Structural Transformation

  • Javier Cravino
  • Andrei Levchenko
  • Marco Rojas
American Economic Journal: Macroeconomics
vol. 14, no. 4, October 2022
(pp. 479–98)
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Abstract

We quantify the role of population aging in the structural transformation process. Household-level data from the United States 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 US 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.

Citation

Cravino, Javier, Andrei Levchenko, and Marco Rojas. 2022. "Population Aging and Structural Transformation." American Economic Journal: Macroeconomics, 14 (4): 479–98. DOI: 10.1257/mac.20200371

Additional Materials

JEL Classification

  • D12 Consumer Economics: Empirical Analysis
  • E21 Macroeconomics: Consumption; Saving; Wealth
  • E23 Macroeconomics: Production
  • J11 Demographic Trends, Macroeconomic Effects, and Forecasts
  • J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
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