Population Aging, Labor Demand, and the Structure of Wages

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. One consequence of demographic change is substantial shifts in the age distribution of the workingage population. As the baby boom generation ages, the usual historical pattern of a high ratio of younger workers relative to older workers has been replaced by a pattern of roughly equal percentages of workers of different ages. One might expect that the increasing relative supply of older workers would lower the wage premium paid for older, more experienced workers. Terms of use: Documents in EconStor mayThis paper provides strong empirical support for this hypothesis. Econometric estimates imply that the size of one's birth cohort affects wages throughout one's working life, with members of relatively large cohorts (at all stages of their careers) earning a significantly lower wage than members of smaller cohorts. Estimated elasticities of wages with respect to the relative size of one's own cohort are generally between -0.05 and -0.10, and are of similar magnitude for men and for women. Our results suggest that cohort size effects are quantitatively important and should be incorporated into public policy analyses.JEL Classifications: J11, J21, J26

Racial/Ethnic Inequality Among Older Workers: Focusing On Whites, Blacks, and Latinos Within the Cumulative Advantage/Disadvantage Framework

“…Substantial research has demonstrated that workers with DC plans tend to work longer than those with DB plans (Cahill et al, 2006;Clark & Quinn, 2002;Friedberg, 2005;Munnell et al, 2004;Purcell, 2009a;Sapozhnikov & Triest, 2007). For example, Friedberg and Webb (2005) used the first four waves (1992, 1994, 1996, and 1998) of the HRS datasets to examine how the decline in DB plan participants has influenced retirement timing.…”

Demographic changes, educational improvements, and earnings in Brazil and Mexico

“…The following section of the paper presents our data and different methods strategies. We include explanations about how we estimated models to evaluate how earnings at the aggregate level are associated with the ageeducation composition of the workforce, i.e., correlations of large cohorts and earnings (Amaral et al 2013b;Berger 1985;Biagi and Lucifora 2008;Brunello 2010;Easterlin 1978;Freeman 1979;Katz and Autor 1999;Katz and Murphy 1992;Korenman and Neumark 2000;Moretti 2004a, Moretti 2004b, Moretti 2004cSapozhnikov and Triest 2007;Shimer 2001;Skans 2005;Welch 1979). We also explain how we conducted an analysis about how the concentration of high-skilled workers in some parts of the country are associated with earnings at the individual level, known as social returns to education (Moretti 2011;Berry and Glaeser 2005).…”

Long Term Influences of Age–Education Transition on the Brazilian Labour Market

“…Studies on the baby boom and the labour market suggest that larger cohorts of workers cause a reduction in income and that this effect is greater for more educated groups (Easterlin, 1978; Freeman, 1979; Welch, 1979; Berger, 1985). Sapozhnikov and Triest (2007) indicated that those born during the baby boom would continue to affect the income structure even after they reach retirement.…”

“…The next section describes the methodology for estimating the impact of changes in age and education structure on workers' income (Amaral et al, 2007). This proposal was based on studies that considered the impact of cohort size on the labour market (Freeman, 1979; Welch, 1979; Berger, 1985; Sapozhnikov and Triest, 2007). Area and time fixed effects removed much of the data variation (Shimer, 2001) so that the effect of demographic and educational changes on workers' income could be accurately estimated.…”