How the working-age population affects productive capacity
One way to measure the productive capacity of a country is to look at its working-age population. Members of this group are most likely to be available for productive employment that can sustain a country’s economic growth. The age range is generally considered to be 15 to 64, although some statistics start later. The graph above shows this population for the United States, Canada, and Japan.
Japan stands out in this trio: Its working-age population has been declining as a result of declining fertility and little immigration. These conditions make it difficult for Japan’s economy to grow. If sustained positive growth is the objective, Japan would need to improve the productivity of its smaller workforce much more than other countries with larger workforces would need to.
The story is different for the United States and Canada. They show continuous growth. While fertility rates have declined a little, immigration has helped sustain population growth. Immigrants are typically of working age, so immigration can increase the working-age population specifically. Although these populations for the United States and Canada track each other pretty well (they were almost identical in late 2016), a little bit of separation has occurred in recent years.
How this graph was created: Search FRED for “population 15-64,” check the relevant series, and click “Add to Graph.” Then change the sample to start on 1995-01-01. Click “Edit Graph,” choose units “Index” with 1995-01-01, and click on “Apply to All.”
Suggested by Christian Zimmermann.