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This chapter concentrates on male relative income, unemployment, and returns to college education. It specifically utilizes aggregate data to look at the impacts of changing relative cohort size on the earning potential of younger men, relative to that of older men. It is assumed that the proportion of the active military aged 20–24 affected the relative income and earnings of young males. Furthermore, trade effects seem to have strongly operated, along with cohort effects, on the college wage premium, but the influences of trade appear to have been much less on male relative income. The male relative earnings will indeed be lower when relative cohort size is large. The cohort size effects have in fact been the most significant factor in deciding the labor market outcomes of young men and women, and are showing signs of exerting strong positive forces over the next few decades.

This chapter covers the historic trends in various measures of relative cohort size and the concept of “asymmetry” around the peak of the baby boom. Richard Easterlin suggested that young adults compare their own recent earnings to their material aspirations. His hypotheses concerning the various effects of relative cohort size assumed that these effects were symmetric around the peak of the baby boom. Cohorts born on the leading edge of the baby boom tended to have higher earnings overall than those born either at the peak or on the trailing edge. Current labor market conditions might have an impact on current age ratios by inducing inter- and intranational migration, with workers moving to areas with higher wages and lower unemployment.

This chapter presents a discussion of population growth and relative cohort size. It also describes women's changing role in society; immigration or international trade effects (or both); the Vietnam War; and the possibility of asymmetry in relative cohort size effects. Women's responses to changes brought about by fluctuations in relative cohort size have provided a buffer against some of the extremes that might otherwise have occurred. There is a strong effect of both imports and exports on relative wages. Large cohort size did not just result in lower relative wages, but also in higher unemployment and higher incidence of “job mismatch.” Richard Easterlin introduced the concept of relative cohort size, the size of one's birth cohort relative to that of one's parents, and suggested that its effects on individuals might persist throughout their lifetimes.

This chapter analyzes the wages at all age levels throughout the workforce. It tries to identify whether the age structure of the population has had a significant effect on the primary dimensions of inequality in the United States over the last thirty-five years: on the return to experience, the return to skill, hours and weeks worked, and on the general structure of wages and level of inequality. Changing relative cohort size can explain a significant proportion of the variation over time in measures of work intensity, such as hours and weeks worked and the proportion working full time, at all levels of experience. Cohort size effects—on wages, unemployment, and hours and weeks worked—have occurred not just among younger workers, but throughout the labor force. Furthermore, changing relative cohort size has been a major factor increasing all types of inequality in the society over the past few decades.

This chapter addresses the global evidence of a strong relationship between relative cohort size and fertility, even in developing nations during the fertility transition. “Demographic transition” is the period during which a country passes from high to low death and birth rates. Relative cohort size has played a crucial role in bringing about the fertility transition in developing countries during that period. Total fertility rates are constant or even increasing until relative cohort size begins to increase: at that point, the total fertility rate begins to decline. Relative cohort size can be thought of as the mechanism that prevents excessive rates of population change—reducing fertility when previous high rates, in combination with low mortality rates, have caused relative cohort size to increase, and increasing fertility when previous low rates have caused relatively small younger cohorts.

This chapter discusses young men's and women's college enrollment rates. It is expected that relative cohort size should exert a significant effect on college enrollments. The large cohorts face a declining college wage premium—the difference between a college wage and a high school wage—and this effect of cohort size will decreases their motivation for further education. The net effect of cohort size on their enrollment probability will be a combination of positive and negative forces. Rising levels of international trade tend to produce rising college enrollment rates. Increasing globalization is increasing the incentive for higher college enrollments, as imports weaken the earning power of less-skilled workers and exports increase the competitive position of more-skilled workers. A significant proportion of the increase in young women's educational level appears to be yet another repercussion of the baby boom.

This chapter investigates the importance of male relative income. It is noted that despite trends toward egalitarian gender-role attitudes and increasing income provision among women, cohabiting men's economic circumstances carry far more weight than women's in marriage formation. Improvements in mothers' relative income may eliminate some of the economic pressure for them to work outside the home, but it would be reckless to presume a mechanical symmetry in relative cohort size effects that leads all the way back to the attitudes of the 1950s just because relative cohort size declines. Underlying preferences regarding women's roles and desired family size do not change as much as current behavior might suggest. The principle of “cognitive dissonance” may tend to bring those underlying preferences more in line with current behavior.

This chapter presents some of the preliminary findings on overall economic performance across all nations (the incidence of recessions and depressions). The unforeseen changes in population age structure have the potential for triggering catastrophic economic turmoil—and virtually always appear to cause at least a degree of economic dislocation. There have been pronounced fluctuations in the proportion of the population aged 15–24 across all nations during the twentieth century, which seem to coincide with major fluctuations in economic activity. The United States has experienced only one episode of declining relative cohort size that seemed to translate almost immediately into increases in fertility. It seems likely that the effects of wartime expenditures will prevent from unraveling the true effects of changing cohort size.

This chapter describes the marriage wage premium. Married men with stay-at-home wives earn a much higher premium than married men with working wives and use this to argue in favor of real productivity effects. Number of years married would be expected to increase a man's marriage wage premium. Increasing relative cohort size was a major factor in the loss of the marriage wage premium and stagnation in average male wages observed over the last twenty years. Women's tendency, as they entered the labor force, to replace their own home production with purchased goods and services generated a marked increase in the proportion of jobs in low-wage retail and service sectors—and men holding such jobs tend to benefit little from any increased specialization in marriage.