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What does an older population mean for the economy, society at large?


The United States is growing older. The median age in this country is rising, according to the Census Bureau. The median is now almost 39 years old, meaning that half the population is below that age and half is above. In the 1980s, the median was 30. So what does an older population mean for our economy and society at large? Economist Nicole Maestas studies those questions at Harvard Medical School. Good morning.

NICOLE MAESTAS: Good morning.

INSKEEP: In the most basic sense, what is driving the median age upward?

MAESTAS: Well, the origins of the increase in the median age really date back to the baby boom. And as the baby boom wound down back in the 1960s, we had a drop in birth rates. That drop in birth rates really never, ever recovered its original levels. And since then, we've had relatively low birth rates and a population that is living longer and longer.

INSKEEP: OK, so fewer young people being born and people who are already on this Earth are living longer. What are the implications of that for the workforce?

MAESTAS: Well, as people age, of course, they eventually age out of the workforce and into retirement. And as that happens more and more, the rate at which the labor force grows starts to slow. As the labor force slows in its growth, we see typically less economic growth. We need workers to produce goods and services in the economy. And so if the number of workers is growing more slowly, that tends to have a direct impact on economic growth.

INSKEEP: I mean, could - I don't know - machines or technology, artificial intelligence, take the place of some of those workers?

MAESTAS: That's exactly right. Now, productivity growth is the other piece that plays a role here, right? So if we can somehow compensate for slowing labor force growth with rising productivity growth, either through machines, AI, automation of other types, that could, at least in theory, offset some of these effects of an older population and slowing labor force growth. In practice, of course, we haven't seen enough of that yet to make a difference, a substantial difference, in the rate at which we're aging and our economic growth.

INSKEEP: You know, when I go out across the country reporting in different places, I will often check the median age of the state or even the county that I'm going to be reporting in. And it's widely different. And this Census Bureau survey suggests the same thing - big differences with some state populations being much older than others. What is the difference between states that seem to be aging faster and those that seem younger?

MAESTAS: Well, that's exactly right. It varies tremendously. You have our oldest state, Maine, where there the median age is nearly 45, our youngest state, Utah, where the median age is more like 32. And, you know, it's the same demographic factors at play here, which largely have to do with historical birth rates and to some degree out-migration, in-migration to the state for economic opportunities, for example.

INSKEEP: Do immigrants keep the population a little younger?

MAESTAS: Immigrants do keep the population a little younger. Immigrants tend to be younger when they arrive, and many immigrant groups have birth rates that are higher. And so that helps. But immigration, of course, hasn't been significant enough to offset the broader effects of aging.

INSKEEP: Nicole Maestas is a professor of health care policy at Harvard. Thanks so much.

MAESTAS: You're welcome. Transcript provided by NPR, Copyright NPR.