from the St Louis Fed
— this post authored by William Emmons, Lead Economist, Center for Household Financial Stability
“Prime-age workers” are those between 25 and 54.[ 1] Numbering almost 100 million in December 2017, this age group is both the largest and most productive set of workers.[ 2] Yet, all of the net increase in employment since 2000 – about 17 million jobs – has been among workers aged 55 and older, as seen in the figure below. Some economists fear that our aging workforce may be holding back economic growth.[ 3]
One important consideration on this topic is that the rapid aging of our workforce is unlikely to continue at this pace. Two important trends contributed to the rapid increase in the share of employment of older workers shown in the chart:
The share of the u.s. adult population aged 55 or older increased from 27 to 36 percent between 2000 and 2017. This rapid change, due to the aging of the baby boomers, is unprecedented and is not expected to continue.
At the same time, the employment-to-population ratio of people aged 55 or older increased from 31 to 39 percent, while the ratio declined from 77 to 72 percent among people under 55. It seems unlikely, although not impossible, that these trends will continue to diverge so significantly.
Future Share of Older Workers
It is possible to forecast future employment shares by age group using Census Bureau population projections of detailed age groups and assumptions about future employment-to-population ratios.
For simplicity, I assumed that the age-specific employment-to-population ratios in the fourth quarter of 2017 will remain constant in the future. The results for employment by age group are shown in the table below for two break points – age 55 and age 65.
