Chapter 17 The economics of population aging This chapter explores the ways in which changing the age structure of the population in the macroeconomic models affects variables such as consumption wages government spending and saving. The chapter also presents the basic data on the ways in which the age structure of the population is evolving over time considers the effects of population aging on production and consumption in the economy as a whole and discusses the effects of aging. One of the salient themes of this chapter is that the costs of population aging currently in prospect are to a large extent simply the passing of the transitory benefits of reduced fertility. A second theme of this chapter is that although aging will not appreciably change the overall burden of transfers that society makes to dependents it will greatly change the channels through which these transfers flow. Population aging has a larger effect on individual transfer schemes considered in isolation than on the net flow of transfers taken together. In the case of government transfer schemes to dependents which focus particularly on the elderly the average age of providing is younger than the average age of receivingand thus population aging enlarges the burden of such transfer schemes.