The faster rates of aging in Europe and Japan may also directly affect investment and, hence, the growth of labor productivity here in the United States. If saving rates in these countries decline, global capital flows to the United States that have contributed significantly in recent years to financing domestic investment are likely to decline.
As in the United States, much will depend on the extent to which retirees in these countries draw down their savings. For example, the saving rate in Japan, even with the rapidly aging population, has not declined to the extent that some had predicted.