Aggregate Evidence on the Link Between Demographics and Productivity ∗

This paper examines the relationship between workforce demographics and aggregate productivity. Cross country regressions show changes in the age structure of the workforce to be significantly correlated with changes in aggregate productivity. Different demographic structures may be related to almost one quarter of the persistent productivity gap between the OECD and low income nations. The magnitude of these correlations is significantly larger than one would expect from the private return to experience, suggesting externalities. Causal mechanisms through inventive activity and management are suggested and evidence from the US census is shown to be consistent with these mechanisms. Results using US state and metropolitan area data suggest that the scope of the externality is largely national, not regional