We employ our method to project economic growth into the future. As seen in Chart 1, the growth slowdown is projected to continue and become more serious during years 2010-2020, with consequences for the overall economic picture of the United States.[8]
Populations' Effect on Growth
The slowdown of GDP growth is explained by the concentration of both population and human capital in the baby boom, which is now being replaced by lower human capital cohorts. This study looks only at human capital, as quantified by standard wage curves, to predict that the U.S. economy will continue to sputter over the coming years. This slowdown is amplified by the retiring of a generation with significant human capital (the baby boom) and its replacement by a generation inadequate in population size to continue the expected and required growth of the macroeconomy.[9]
Human Capital
Chart 3 shows the course of development human capital typically takes over the life course of workers. There are four basic phases in workers' lives.[10] Prior to entry into the workforce there is a training or formative period.