Population Aging and Structural Transformation

72 Pages Posted: 7 Oct 2019 Last revised: 14 May 2021

See all articles by Javier Cravino

Javier Cravino

University of Michigan; NBER

Andrei A. Levchenko

University of Michigan - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Marco Rojas

University of Michigan at Ann Arbor

Multiple version iconThere are 2 versions of this paper

Date Written: September 2019

Abstract

We quantify the role of population aging in the structural transformation process. Household-level data from the U.S. 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 U.S. 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.

JEL Classification: E2, O1, O4

Suggested Citation

Cravino, Javier and Levchenko, Andrei A. and Rojas, Marco, Population Aging and Structural Transformation (September 2019). CEPR Discussion Paper No. DP14026, Available at SSRN: https://ssrn.com/abstract=3464571

Javier Cravino (Contact Author)

University of Michigan ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
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NBER ( email )

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Andrei A. Levchenko

University of Michigan - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

HOME PAGE: http://alevchenko.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Marco Rojas

University of Michigan at Ann Arbor ( email )

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