Estimating the Effect of the Age Distribution on Cyclical Output Volatility Across the United States

26 Pages Posted: 24 Dec 2013

See all articles by Steven Lugauer

Steven Lugauer

University of Kentucky - Department of Economics

Date Written: June 2012

Abstract

I exploit the variation in demographic change across the United States to estimate the relationship between the age distribution in the population and the magnitude of cyclical output volatility. According to panel regression estimates the relative supply of young workers, or youth share, has a statistically significant effect on the volatility of state-by-state gross domestic product. Moreover, changes to the age distribution can account for up to 58% of the recent reduction in business cycle fluctuations, indicating a critical link between the youth share and output volatility.

Keywords: Business Cycles, Demographics

JEL Classification: E32, J10

Suggested Citation

Lugauer, Steven, Estimating the Effect of the Age Distribution on Cyclical Output Volatility Across the United States (June 2012). Available at SSRN: https://ssrn.com/abstract=2334366 or http://dx.doi.org/10.2139/ssrn.2334366

Steven Lugauer (Contact Author)

University of Kentucky - Department of Economics ( email )

Lexington, KY 40506
United States

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