The Demand for Aging Boomers Robert K. Triestand Margarita Sapozhnikov Federal Reserve Bank of Boston Boston College Prepared for the NASI 18th Annual Policy Research Conference “Older and Out of Work: Jobs and Social Insurance for a Changing Economy” January 19-20, 2005 Washington, D.C.

The entry of the baby boom into the labor force resulted in a large increase in the ratio of entry-level workers to more experienced workers. As the boomers have “matured,” the age distribution has become much flatter.

The change in the age distribution differs greatly by degree of educational attainment. Because the boomers tended to be better educated than preceding cohorts, college educated boomers experienced more cohort crowding than did those with less education.

Entry-level workers and more-experienced workers tend to perform different tasks and have different roles in the production process. As a result, the relative wages of workers with different experience levels will depend on their relative supplies.

Regression results using Current Population Survey data from 1964 to 2004 imply that relative cohort size has substantial effects on wages for men. The cohort size effects are larger for college educated men than they are for high school educated men.

Estimated Effects of Cohort Size Relative to 1950 Birth Cohort for Male High School Graduates

Estimated Effects of Cohort Size relative to 1950 Birth Cohort for Male College Graduates

Changes in the experience composition of the labor force exert a powerful influence on the structure of wages. The entry of the boomers into the labor market was accompanied by an increase in the premium paid for labor market experience. This effect was partially reversed as the baby boomers progressed into middle age.