Demography and Retirement: The Twenty-First Century

By Anna M. Rappaport; Sylvester J. Schieber | Go to book overview
Save to active project

5
The Impact of the Demographic Transition on Capital Formation

Alan J. Auerbach and Laurence J. Kotlikoff


INTRODUCTION

The population of the United States is aging. As of 1990, about one fifth of the total U.S. population was over 55 years old. 1 In fifty years that figure will be close to one third. This aging will be particularly acute among the older old. Currently, those over age 75 represent only 5 percent of Americans. By 2040 this figure this projected to grow to about 12 percent.

At the same time that the elderly fraction of the population is increasing, the relative population of young people will be declining. While well over half the population was under age 35 in 1990, this figure is projected drop to just over 40 percent by the year 2040.

This aging of the population, which is attributable to declining rates of fertility and mortality, has a range of implications for the level and composition of national saving and capital formation in the United States over the next several decades. In this paper, we review a variety of these implications and discuss the policy issues that they raise.

In considering these issues, we will focus primarily on the United States. However, one should keep in mind that many other countries are simultaneously undergoing demographic transitions as strong or stronger than the United States. In Japan, for example, the demographic transition is occurring at a more rapid pace. Almost a quarter of the Japanese population is currently 55 or older; by 2010 almost a third of the Japanese population will be 55 or older compared with only a quarter of the U.S. population. The existence of such a demographic transition in many of the industrialized countries means not only that the lessons leaned for the United States may apply much more broadly, but also that the pattern of international capital flows that one might associate with a single

-163-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
Demography and Retirement: The Twenty-First Century
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 334

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?