Independent Fiscal Office: Speed Up In The Decline Of Working Age People Thru 2030 Will Constrain Economic, Revenue Growth In PA

On September 8, the Independent Fiscal Office released a Demographic Outlook Report on Pennsylvania that projects the speed up in the decline of the working age population in the state “will constrain economic and revenue growth in the future” through 2030.

The main conclusions in the report were--

-- Overall Population: The total population was nearly flat from 2015 to 2020 and is projected to contract slightly in the near term (-0.1 percent per annum) and long term (-0.2 percent per annum).

-- School Age Children: The school age cohort (age 0 to 19) has declined 0.6 percent per annum from 2015 to 2020 and is projected to contract at the same rate in the near term, but slightly more in the long term (0.7 percent per annum).  

-- Working Age Population: The working-age cohort (age 20 to 64) declined 0.5 percent per annum from 2015 to 2020 and is projected to contract by 0.7 percent per annum in the near term and 0.6 percent per annum in the long term.

In 2025, this group includes mostly Generation X (born between 1965 and 1980) and Millennials (born between 1981 and 1997) and a portion of Generation Z (born between 1998 and 2015). 

If labor force participation rates do not increase, then this trend will constrain economic and revenue growth in the future. 

-- Retirees: The retiree cohort (age 65 to 79) increased 3.3 percent per annum from 2015 to 2020 and is projected to expand by 2.6 percent per annum in the near term and then expand 0.6 percent per annum in the long term. 

In 2025, this group includes most of the Baby Boom Generation (born 1946 to 1964). 

The increase in this age cohort and the next age cohort implies strong demand for healthcare and long-term care services moving forward.

-- Elderly: The elderly cohort (age 80+) increased 0.2 percent per annum from 2015 to 2020 and is projected to expand by 1.9 percent per annum in the near term and 3.9 percent per annum in the long term.

In 2025, this group mostly includes the Silent Generation (born between 1926 and 1945) and a very small number of individuals from the Greatest Generation (born between 1905 and 1925). 

Click Here for a copy of the full report.

[Posted: Sept. 8, 2020]