Aging US population may cut workforce, wealth-Kohn
WASHINGTON, Feb 28 (Reuters) - An aging U.S. population will hold down the growth of the labor force, threatening the economy's overall output and the wealth of future generations, Federal Reserve Board Vice Chairman Donald Kohn said on Wednesday.
"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 life cycle is maintained," Kohn said in prepared testimony before the U.S. Senate Special Committee on Aging.
Kohn's remarks did not include any comments on the central bank's monetary policy outlook or recent financial market movements.
He cited a Fed staff study showing that annual U.S. labor force growth would slow to 0.25 percent by 2015 from 1.25 percent in recent years.
"The aging of the population has important implications for the living standards of current and future generations," Kohn said. "Because total output is equal to output per worker times the number of workers, a slowdown in the rate of labor force growth will, all else equal, tend to slow the growth of output."
