The Effects of Aging Populations on U.S. Communities

Abstract

As the population in affluent countries has been experiencing rapid aging, understanding its impact on the regional economy has become an important research topic. In this study, we investigate whether regional population aging has affected the economy in the United States. Using instrumental variables based on age structure, we have identified significant positive impacts on employment growth and negative impacts on the population growth rate. Additionally, there was no significant impact on local wages but a positive impact on rent levels. This can be interpreted as evidence that a higher proportion of the elderly population actually enhances local production and consumption amenity levels, as suggested by the spatial equilibrium model. These results imply that regional population aging may not have a significant negative impact on the regional economy.