that by the time men born in 1935 reached age 30, about 97 percent of them were in the labor force. in contrast, only about 92 percent of 30 - year - old men born in 1976 were in the labor force. although not shown in the exhibit, a roughly similar pattern exists for men older than 30, and, all else equal, the gradual reduction in labor force participation of men has put downward pressure on the overall participation rate. exhibit 3 also shows that, until recently, the decline in the labor force participation rate of successive generations of men had been more than offset by a steady increase in the participation rates for each new generation of women. women born in the 1920s and 1930s had low participation rates at age 30, but three - fourths of 30 - year - olds born in 1960 were in the labor force. however, participation rates for more recent generations of 30 - year - old women have not risen any further. economists at the federal reserve have developed a model that combines information on the decline in labor force participation at older ages, shown in exhibit 2, with information on the changes in labor stephanie aaronson, bruce fallick, andrew figura, jonathan pingle, and william wascher ( 2006 ), “ the recent decline in the labor force participation rate and its implications for potential labor supply, ” brookings papers on economic activity, 2006 : 1, pp. 69 - 154. the baby boom is generally taken to be children born from 1946 through 1964. the census bureau estimates that roughly 78 million american baby boomers were alive as of july 1, 2005, and that approximately 2. 9 million americans turned 60 in 2006. u. s. census bureau ( 2006 ), “ facts for features : special edition, oldest baby boomers turn 60, ” press release cb06 - ffse. 01 - 2, january 3, www. census. gov / press - release / www / releases /. this projection combines the latest estimates of population from the bureau of the census for 2006 ( http : / / www. census. gov / popest / estimates. php ) with the census bureau ’ s projections of population growth by age through 2015 ( http : / / www. census. gov / ipc / www / usinterimproj ). force participation across generations, shown in exhibit 3. exhibit 4 shows the actual participation rate, the model ’ s estimate of the underlying trend in the total participation rate between 1995 and 2006, and – under

donald l kohn : the aging workforce testimony by mr donald l kohn, vice chairman of the board of governors of the us federal reserve system, before the special committee on aging, us senate, washington dc, 28 february 2007. * * * chairman kohl, senator smith, and members of the committee, i am pleased to be here today to discuss some recent research at the federal reserve on the effect that population aging may have on the growth of the labor force. 1 the research is careful and important, but i would like to emphasize that it is a staff product and so does not necessarily represent the views of the federal reserve board. as we all know, the united states is at the front edge of a massive and important shift in the demographic composition of the population. the onset of the traditional retirement years for the oldest members of the baby - boom generation, 2 coupled with a trend toward greater life expectancy and relatively low fertility rates, will cause the share of older individuals in the population to rise markedly in the years ahead. how our society responds to the challenges associated with demographic change will have important consequences for the longer - run prospects for economic growth, average living standards, and the distribution of income and consumption across generations. the main demographic story is in exhibit 1, which shows that around 2003, the population of those aged 62 and older began growing as a share of the population aged 16 and older. age 62 is important as the time at which individuals become eligible for social security retirement benefits under current law. according to projections from the bureau of the census, shown in the shaded area of exhibit 1, the upward trend in aging will steepen noticeably in the next few years. the share of the adult population that is aged 62 and older, now at about 19 percent, is projected to rise to more than 22 percent by 2015. 3 a subset of the adult population is the labor force – that is, those who are either actively looking for work or have a job. because the participation of men and women in the labor force declines sharply after age 55, as shown in exhibit 2, the rising share of older individuals has important implications for the nation ’ s labor supply. in particular, the aging of the population will put significant downward pressure on the total labor force participation rate in coming years, provided the basic pattern of participation over the lifecycle is maintained. changes in labor force behavior within age groups also have the potential to add to the downward trend in labor force participation. exhibit 3 shows