Why does demographic change matter? A 2006 report for the Congressional Research
Service4 (CRS) reviewed many of the trends outlined here, and found three broad areas
where they will matter: the workforce, immigration, and intermarriage. The first is in
work, retirement, and pensions. As the population becomes older, the number of people
drawing social security and other old age benefits, as well as private pensions, will
increase as a proportion of the overall working population. Note also that in Figure
2.7 we saw overall male participation in the workforce declining, a result in part of
older men leaving the workforce with more younger women entering than before.
Some of this retirement is driven by trends in “private wealth and income security,”
according to a 2006 CRS report, which relates both to private retirement and pension plans and to the nature of social security benefits. In particular, with many more retirees
in the system, “a major domestic political challenge of the twenty-first century will
be how to adapt our old-age income security and health insurance systems to ensure
financial solvency while ensuring that there is an adequate safety net to protect the
most vulnerable in the population.”5 According to the report, this will result from the
use of private savings. Of course, the major recession and the drop in the value of
investments in 2008 through 2010 suggest at least a short-term problem with retirement
income for millions of Americans. This appears to have induced many Americans to
plan to work past the retirement age of sixty-five. This, in turn, will have important
implications for employment and job creation.