1. Comments on “The Effect of Population Growth on Economic Growth” by Maestas, Mullen, Powell Robert J. Willis Working Longer Conference SIEPR October 9-10, 2014

2. Summary Use cross-state variation in age structure from 1980- 2010 to estimate effect of aging on output per head Use IV to eliminate possible endogeneity of state age structure due to migration – 1 st Stage: Age Structure in t-10 used to predict age structure in t Find 10% increase in %Pop over 65 decreases GDP per capita by 5.7%, primarily due to decrease in supply of labor. Find some decrease in productivity, possibly indicating that older cohorts may be more productive than younger cohorts they are replacing

3. What is population aging? In steady state, an older population is the consequence of lower fertility and/or lower mortality. – The rate of growth of the population is determined by the net reproduction rate In the U.S., our age structure is changing more slowly and less regularly than in other advanced countries – U.S. fertility near replacement – Post-WWII Baby Boom has produced echo – Immigration

4. U.S. Age Structure 2010-2050 Aging of Baby Boomers Baby Boomers now

5. Comments MMP have devised a clever scheme to use variation in past age structure across states to investigate variations in age structure similar in magnitude to variations in age structure that we will face in the first half of this century – Their IV approach seems to me to be a valid way to purge the confounding effects of immigration Estimates basically show that aging causes reduced per capita output because old people are not working. – I think this implies that the productivity effects of aging could be estimated using standard growth accounting techniques – Put differently, there don’t seem to be important spill-over or externality effects of aging that need special treatment.

6. Comments MMP have devised a clever scheme to use variation in past age structure across states to investigate variations in age structure similar in magnitude to variations in age structure that we will face in the first half of this century – Their IV approach seems to me to be a valid way to purge the confounding effects of immigration Estimates basically show that aging causes reduced per capita output because old people are not working. – I think this implies that the productivity effects of aging could be estimated using standard growth accounting techniques – Put differently, there don’t seem to be important spill-over or externality effects of aging that need special treatment.

7. But what is the experiment? The IV estimates are reduced form estimates from data on 50 United states in a fiscal union The challenges of population aging largely concern the trade-offs between the support of the elderly and making investments in the human and physical capital in the productive power of the economy. There is little reason to expect the estimated reduced from the 50 states to remain stable as the political and economic aspects of this challenge play out in the future

8. Trends in age profiles of consumption

9. Conclusion Clever IV estimate of effect of variations in age distribution on labor productivity Need more discussion of how these estimates fit into an assessment of the challenges the U.S. faces as it grows older during the next 30 years