The fortunes of one's birth: Relative cohort size and the youth labor market in the United States
Macunovich, D.J.
Journal of Population Economics 12(2): 215-272
1999
ISSN/ISBN: 0933-1433 Document Number: 280289
Using two different measures of relative cohort size – one indicating the size and placement of an individual's own birth cohort, and the other, the ratio of young to prime age adults in the United States in that year – it has been possible to isolate strong effects of the population age structure on wages in the United States over the past thirty-three years. These effects have been strong enough that virtually all of the observed change in the experience premium, and a substantial proportion of the changes in the college wage premium, can be explained by the relative cohort size variables alone. Even changes in the amount of within-group variance in wages appear to be largely a function of changing age structure, and absolute wage levels have been strongly affected by these demographic changes, suggesting that population growth can have positive effects on the economy.