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Economists have studied the potential effects of shifts in the age distribution on the unemployment rate for more than 50 years. Most of this analysis uses a "shift-share" method, which assumes that the demographic structure has no indirect effects on age-specific unemployment rates. This paper uses state-level data to revisit the inuence of the age distribution on unemployment in the United States. We examine demographic effects across the entire age distribution rather than just the youth share of the population|the focus of most previous work|and extend the date range of analysis beyond that which was available for previous research. We find that shifts in the age distribution move the unemployment rate in the direction that a mechanical shift-share model would predict. But these effects are larger than the mechanical model would generate, indicating the presence of amplifying indirect effects of the age distribution on unemployment. [ABSTRACT FROM AUTHOR]

The article discusses a study which developed a cohort-based model that decomposes the influence of age-specific trends on labor force participation. The study estimated the model on data from 1977 to 2005 without the influence of most recent eight birth cohorts. It mentions that the model was able to show the differences in participation across ages, differences in propensities to participate across birth cohorts, and the changes in the age distribution of population.

While Korea remains one of the fastest-growing OECD economies, its potential growth rate per capita is projected to decelerate from around 4% during the current decade to around 2 1/4 per cent during the 2030s. Sustaining output growth requires policies to mitigate the impact of rapid population ageing by increasing labour inputs from under-utilised segments of the population. In particular, female labour participation should be encouraged by better work-life balance and increasing the availability of high-quality, affordable childcare, in part by raising tuition fee subsidies and improving the quality of private childcare centres. More flexible employment and wage systems would increase the age at which older workers leave firms. For young people, improved vocational education at the secondary and tertiary levels would help overcome the labour mismatch problem and the overemphasis on tertiary education. Enhancing educational quality at all levels would promote productivity gains, including in services. Strengthened competition is also a key to narrow the large productivity gap between services and manufacturing. [ABSTRACT FROM AUTHOR]

Raising labour force participation is of major importance for sustaining vigorous growth, especially in the face of population ageing. The major challenge is to increase participation among women with families and lone parents, disability benefit recipients and older workers over 55. While participation decisions reflect personal choices, these are influenced by policy settings. Despite improvements in "inactivity traps", Australia ranks high internationally in terms of "low wage traps" for lone parents and one earner households. Tackling such "low wage traps" either by addressing allowance and parenting payment income tests or by reducing the lowest income tax rate or raising the threshold at which income tax is first paid, should be a priority. Access to affordable child care also plays an important role in facilitating female participation, and efforts towards this end need to continue. Encouraging older people to stay in work longer requires removing incentives for early retirement. Imposing the recently announced tighter eligibility and participation requirements for disability pensioners uniformly across all recipients would also be beneficial. [ABSTRACT FROM AUTHOR]

The aging of the American population and the retirement of the baby boom generation will place financial strains on Social Security, public and private pensions, and on retirees' personal savings. Since the 1960s, birth rates have fallen and average life expectancy has increased. Consequently, the number of workers relative to the number of retirees is projected to decline, and retirees will have to stretch their savings and other assets over longer periods of retirement than their parents and grandparents experienced. This CRS report presents data collected by the Census Bureau from 1969 through 2005 that describe how the demographic traits, employment patterns, and the sources and amounts of income of people 65 and older have changed over a period of nearly 40 years. America's elderly today are older, more racially and ethnically diverse, better educated, and less likely to be widowed than the elderly population of the late 1960s. The increasing number of Americans living to age 80 and older is of particular significance because it is the very old who are most likely to need medical, social, and long-term care services, and who are at the greatest risk of depleting their financial resources and slipping into poverty. Rates of employment among older persons have been rising in recent years. Employment rates fell among men 55 and older from the late 1960s to the early 1990s. Since then, employment rates have risen for older men, but they remain below the employment rates of the 1970s. Among older women, employment rates have steadily increased, but older women's employment rates today remain lower than those of men the same age. Earnings, Social Security, pensions, and income from assets comprise the majority of income among people 65 and older today, just as they did 35 years ago. Wages and salaries today constitute a greater proportion of the aggregate income of the elderly than at any time since the late 1970s. Since the early 1990s, both the share of aggregate income received from assets and the percentage of older persons with asset income have fallen. Social Security has remained a fairly stable share (about 40%) of the total income of people 65 and older. The percentage of men receiving pension income rose until the early 1990s and then fell. More women today have pension income, but their average pension is half the amount that men receive. Median household income rose faster among elderly households than among nonelderly households from 1969 through 2004, but in 2004 the median annual income of households in which the householder or spouse was 65 or older ($25,210) was just half of the median income of younger households ($50,466). The rise in the income of elderly households coincided with a decline in the poverty rate among people 65 and older from 25% in 1969 to just 10% in 2004. Also since the 1960s, the rate of decline in median personal and household income that occurs as people pass age 60 and begin to retire has slowed. Growth in real wages -- and in the Social Security and pensions based on these wages -- has contributed greatly to the economic well-being of today's retirees. This report will be updated every two years. [ABSTRACT FROM AUTHOR]