The overall U.S. population is aging. As the top graph shows, the percent of the population between 16 and 64 years of age (generally considered working age) has been declining since about 2007. At the same time, the percent of the population 65 years and older has been increasing. From 2007 to 2014, the working age population as a percent of the total population fell from 64.9% to 63.6%, while the 65+ population rose from 12.5% to 14.4%. As the working age population shrinks relative to the total, the dependency burden (the ratio of dependent young and old to those of working age) increases.
The aging U.S. population is explained mostly by differences in fertility rates before and after 1970. Although FRED data begin only in 1960, research estimates that the U.S. fertility rate increased after World War II and peaked around 1960. This period of high fertility is the “Baby Boom.” As the bottom graph shows, starting in 1960 the rate fell dramatically—from 3.6 births per woman to below 2—and has lingered around 2 since. With a fertility rate below 2 births per woman, the flow into the working age population is lower than the outflow from the aging and retirement of the Baby Boomers, which contributes to the fall in the working age population ratio.
Note: The top graph includes OECD data, which use 15-64 years as the working age population; U.S. data typically use 16-64 years.
How these graphs were created: For the top graph, search for “working age population” and choose the series with an annual frequency. In the “Add Data Series” field, search for and select “Population, Total for United States.” Use this series to modify data series 1: In the “Edit Data Series 1” / “Create your own data transformation” section, insert the formula (a/b)*100. Then add the “population ages 65 and up” series with an annual frequency, with units set as a percent of total. Move the y-axis position to the right and adjust the date range to be between January 2000 and January 2014. For the bottom graph, simply search for and select “US fertility rate.”
Suggested by Maximiliano Dvorkin and Hannah Shell