["Review of Development Economics, EarlyView. ", "\nABSTRACT\nThe demographic structure is undergoing a significant shift towards an aging society, increasing the demand for services and influencing the pattern of structural transformation. We present an extended OLG model with the driving force of population aging on structural transformation. Moreover, the model highlights age‐related preferential shifts, suggesting that agents shift their preference toward health‐related services as they age. Therefore, workers were reallocated from the agricultural and industrial sectors more towards the service sector, especially health‐related services. The empirical evidence robustly proves the same pattern, particular in developed economies.\n"]