to estimate the impact of aging on productivity, either measures based on market earnings or ones based on aggregate measures of productivity.
AGING AND THE ECONOMICS OF
INNOVATION AND INVENTION
The first important question involves the impact of changes in the age distribution of the population on a society’s innovation and invention. An important aspect of new knowledge is that it is a public good, a process in which new technologies generated anywhere can potentially spread and be used by all, young and old, rich and poor, at home and abroad. Hence the stock of useful and productive knowledge should be seen in the context of the global stock rather than that of an individual person or country. If other countries take up more of the innovational activities that were over the last century led by the United States and other current high-income countries, the overall trend in income and productivity growth might well continue to grow rapidly. So a first important point is that it is global inventive and innovative activity that over the coming decades will influence long-run U.S. productivity and income growth. Countries are not technological islands in an increasingly globalized world. As countries grow and increase their inventive activity in an increasingly networked world, the United States will benefit from the inventiveness outside its borders (Jones and Romer, 2010).
While long-run productivity growth is likely to be largely determined by global trends in frontier technologies, national characteristics are critical for diffusion and adoption of best-practice technologies and for actual levels of productivity. Studies of diffusion show that best-practice knowledge and techniques diffuse more slowly across national borders than within nations. The rate of adoption depends on many non-age-related factors, such as openness to trade and capital flows; competitiveness of domestic market structures; profitability; and regulatory structures. The major impacts of age-related factors reflect the composition of demand. For example, an aging population or one with strong demand for health services is likely not only to generate but also to adopt technologies that are in great domestic demand in this sector.
There is a substantial literature on the age distribution of producers of inventions, patents, publications, and other creative material. Historians of science have generally concluded that scientific output tends to rise steeply in the twenties and thirties, peak in the late thirties or early forties, and then trail off slowly through later years. There is some variation among disciplines, but most studies find that peak scientific productivity tends to be in the interval between ages 30 and 40 (Lehman, 1953; Simonton, 1988 and 1991).
Benjamin Jones (2010) has investigated the question of age and “great