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Harness the Economic Power of an Aging Population

Author: Michael W. Hodin, Adjunct Senior Fellow
January 17, 2012
The Fiscal Times

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As the debate over American market capitalism takes center stage in the presidential campaign, it's a good time to focus on the relationship between economic growth and our senior population, since the greatest social movement of the coming decades will be our aging citizenry. As we work to harness the potential of this changing demographic group, presidential candidates might consider an interesting parallel with the integration of women into economic life in the last half of the 20th century.

Women's economic empowerment met steady opposition early on, based on the mistaken view that females would take jobs away from males. But as history has shown, an economy that includes women is an economy that grows. And a growing economy has room – and the need – for new entrants. If American market capitalism teaches anything, it is that we need to prevent barriers into economic life for people of all genders, races, and ages, and indeed, to help make these new entrants part of the very engine that drives growth. If it was never true that women would take men's jobs, it's equally untrue that keeping an aging workforce active will not take younger generations' jobs, as has been documented by Axel Boersch-Supan in his groundbreaking work on intergenerational cohesion. He concludes, "We find no evidence that the burden of population aging…is systematically related to broad array of indicators of intergenerational conflict."

Yet there are issues that will emerge if we play out the parallel storylines. Despite the profound progress women have made in the workforce, there remain undeniable differences and inequalities. Women have a different set of questions to answer than men, and they face unique challenges. As an obvious example, most women take time to bear children and raise them, either by choice or default, thus delaying their climb up the professional ladder. Though more men are beginning to act as homemakers, the percentages are still heavily tilted toward women. With this and other unique challenges women face, are they worse off in their senior years than men?

It depends who you ask.

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