NBER

Marco Rojas

Department of Economics
University of Michigan
611 Tappan Street
Ann Arbor, MI 48109

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: University of Michigan

NBER Working Papers and Publications

September 2019Population Aging and Structural Transformation
with Javier Cravino, Andrei A. Levchenko: w26327
We propose and quantify a novel mechanism behind the structural transformation process: older individuals devote a larger share of their expenditures to services, so the relative size of the service sector grows as the population ages. In a large sample of countries, we document that increases in population age are accompanied by the rise in the relative size of the service sector. In household-level data from the U.S. Consumer Expenditure Survey, the fraction of expenditures devoted to services increases with household age. We use a shift-share decomposition and a quantitative model to show that changes in the U.S. population age distribution accounted for about a fifth of the observed increase in the share of services in consumption expenditures between 1982 and 2016. The contribution of...

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