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6 posts on "Demographics"

February 17, 2017

A Close Look at the Decline of Homeownership



LSE_A Close Look at the Decline of Homeownership

The homeownership rate—the percentage of households that own rather than rent the homes that they live in—has fallen sharply since mid-2005. In fact, in the second quarter of 2016 the homeownership rate fell to 62.9 percent, its lowest level since 1965. In this blog post, we look at underlying demographic trends to gain a deeper understanding of the large increase in the homeownership rate from 1995 to 2005 and the subsequent large decline. Although there is reason to believe that the homeownership rate may begin to rise again in the not-too-distant future, it is unlikely to fully recover to its previous peak levels. This is a disconcerting finding for those who view homeownership as an integral part of the American Dream and a key component of income security during retirement.

Continue reading "A Close Look at the Decline of Homeownership" »

Posted by Blog Author at 7:02 AM in Demographics, Housing | Permalink | Comments (2)

September 28, 2016

U.S. Real Wage Growth: Slowing Down With Age



LSE_U.S. Real Wage Growth: Slowing Down With Age

Second of two posts
In Monday’s post, we described the estimation of real wage growth rates for different cohorts of U.S. workers. We showed that the life-cycle pattern of real wage growth is characterized by high growth early in a worker’s career, little to no growth in mid-career, and negative growth as workers near retirement. We also documented that a growing fraction of the U.S. adult population is transitioning into the flat to negative real wage growth phases of their careers. Here, we turn our attention to estimating the effect of this demographic shift on the economy-wide average real wage growth rate. Our analysis shows that this economy-wide average real wage growth rate has declined by a third since the mid-1980s.

Continue reading "U.S. Real Wage Growth: Slowing Down With Age" »

Posted by Blog Author at 7:00 AM in Demographics, Employment, Expectations, Unemployment, Wages | Permalink | Comments (2)

August 10, 2016

Puerto Rico’s Shrinking Labor Force Participation



LSE_Puerto Rico’s Shrinking Labor Force Participation

A key concern about Puerto Rico’s prospects is that its labor force participation rate, which is the percentage of the adult population either working or looking for work, has fallen sharply. Looking at the data shows that this decline cannot be attributed to any particular demographic segment. Instead, it is the consequence of an aging population, accelerated by a falling birth rate and outmigration of a relatively young cohort. Expected demographic trends will continue to put downward pressure on the participation rate over the medium term, creating a challenging headwind for the economy to overcome.

Continue reading "Puerto Rico’s Shrinking Labor Force Participation" »

May 06, 2015

U.S. Potential Economic Growth: Is It Improving with Age?



LSE_2015_us-potential-growth-kapon-450_art

The contribution of labor input to the potential GDP growth rate for the United States has changed over time. We decompose this contribution into two components: the size of the adult population and the average demographically adjusted employment rate. We find that these two components in the late 1960s and early 1970s contributed at least 2.5 percentage points to potential growth. Since the mid-1990s, the aging of the population has reduced the contribution of labor to growth. We estimate that the current contribution to potential economic growth from labor input has declined to around 0.6 percentage points. One implication going forward is that more labor productivity growth will be required to sustain U.S. growth.

Continue reading "U.S. Potential Economic Growth: Is It Improving with Age?" »

Posted by Blog Author at 7:00 AM in Demographics, Employment, Labor Economics, Macroecon | Permalink | Comments (4)

April 13, 2015

Population Lost: Puerto Rico’s Troubling Out-Migration



LSE_2015_puerto-rico-migration-450_art

For the first time in modern history, Puerto Rico is seeing its population decline. This troubling loss can be traced to an exodus of Puerto Rican citizens to the U.S. mainland, a current that has picked up considerably in recent years as Puerto Rico’s economy has deteriorated. Today, fully a third of those born in Puerto Rico now reside on the U.S. mainland. In this post, we examine the recent surge in out-migration that is driving Puerto Rico’s population decline (which we delve into in more detail in a recent article in the New York Fed’s Current Issues in Economics and Finance series), and then discuss measures the Island could adopt to address this troubling trend.

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Posted by Blog Author at 7:00 AM in Demographics, Puerto Rico, Regional Analysis | Permalink | Comments (5)

October 08, 2014

Demographic Trends and Growth in Japan and the United States



IStock_000042647488Small_300 Japan’s population is shrinking and getting older, with the population falling at a 0.2 percent rate this year and the working-age population (ages 16 to 64) falling at a much faster rate of almost 1.5 percent. In contrast, the U.S. population is rising at a 0.7 percent annual rate and the working-age population is rising at a 0.2 percent rate. So far, supporting the growing share of Japan’s population that is 65 and over has been the substantial increase in the share of working-age women entering the labor force. In contrast, U.S. labor force participation rates have been falling for both men and women. Japan’s labor market adjustments help explain the steady, albeit, modest growth in output per person despite the surge in the 65 and over cohort. Indeed, Japan has been able to match U.S. per capita growth since 2000.

Continue reading "Demographic Trends and Growth in Japan and the United States" »

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