Many economists are puzzled by the slowing of the growth rate in U.S. productivity. While the decline in the years 2007 to 2009 clearly may be explained by the onset of the Great Recession, what about the last six years — from 2009 to 2015? Why such slow growth now?
A big part of it lies in the recent and widespread loss of older workers in the workforce. A recent paper by Nicole Maestas of Harvard University, and Kathleen Mullen and David Powell of the Rand Corporation, is one of the first to tease out the impact of the loss of older workers on the broader economy.
Their conclusion: On average, every 10 percent increase in the share of a given state’s population over age 60 reduced per-capita productivity increases by 5.5 percent.