Aging and the Labor Market

Population aging will impact on the labor market in at least two ways. First, the number of people in the standard working ages (20?64) will fall. This is generally accepted as being a cause for concern because, all else equal, a smaller pool of workers will have to support a larger number of dependents. Second, the proportion of older workers will rise. This is often thought to be a concern based on the assumption that older people are less productive. The evidence for this turns out to be weak. The relative importance of the two effects suggests that policy should focus on extending work lives.