Archive for the ‘Demographics’ category

“But NH Isn’t Dead”

November 17, 2016

There is a scene from the movie “Monty Python and the Holy Grail” where a wagon stacked with bodies is being pulled through a plague infested medieval village while a crier calls out “bring out your dead.”  The comedy in that grim scene comes when a man tries to load a body slung over his shoulder onto the wagon and against the protests of the still quite alive “dead man” who says such things as “but I’m not dead,” I’m feeling better,” and “I think I will go for a walk.” I am reminded of that movie scene every time I hear proclamations about NH being the 1st or 2nd oldest state in the nation.

An excellent radio program in NH (especially  when I am guest – I wasn’t on this broadcast) recently spent an hour discussing the implications of NH being “the second oldest state in the nation.” The operational definition of “second oldest state” was never given but I assume it is based on the median age of the state’s population.  Using 5 year Census Bureau estimates (2010-14) NH has the third highest median age of any state in the nation (collective gasp here), behind only Maine and Vermont.

median-age

Before administering the sacrament of the anointing of the sick to New Hampshire, however, understand that a state’s median age says relatively little about the age distribution of a population and even less about the demographic and public policy challenges (and their severity) that a state will confront in the future.  Does NH’s high median age really mean our state is worse off demographically than 47 other states?

First, a high median age doesn’t mean NH has a disproportionate number of elderly residents.  It does mean, and has for some time, that NH has a high percentage of residents in the middle of the age distribution and fewer at early ages. As the chart below shows, on the percentage of the population age 65+, NH ranks 15th among all states and below many states with a lower median age.

age-65

Second as I argued here, if you want to understand the strains that an older demographic may place on the fiscal system of a state or a nation you need to look at the “old age dependency ratio,” or the number of older residents in relation to the number of working-age residents because that is a measure of the population that will largely be paying for or supporting the services for the older population.  There will be more elderly in NH and that will increase service needs but the fiscal pressures those needs place on the state is a function of both the number in need of services and the number of working age individuals supporting the services (that is why China’s “one-child” policy that results in  four grandparents, two parents, and one child was always a demographic ponzi scheme).   The old-age dependency ratio is rising in NH but again, on that metric, NH hardly looks  that much worse off than most states as it is firmly in the middle of all states on the ratio of residents age 65+ to working age residents.  In addition, because NH has relatively healthier and more well-off older residents compared to many states, our dependency ratio probably slightly overstates the challenge the old-age dependency ratio presents to the state. With NH’s lowest in the nation birth rates the old-age dependency ratio could rise rapidly depending on migration trends (as has been the case in recent years) and is one more reason to want to make our state broadly appealing to demographic groups.

dependency-ratio

NH does face significant demographic challenges and if overstating their magnitude is necessary for action to address them then I guess I can live with that.  But too often the discussions of the demographic challenges facing NH are laced with agenda driven diagnoses and  prescriptions that make for great headlines but ineffective policies.

Low birth rates (NH now has the lowest in the nation) resulting from high labor force participation and levels of educational attainment among women in NH (a sign of our state’s successes not our failures) along with low mortality rates among an older population that is both healthier and wealthier (on average) than in most states, is a recipe for a higher median age in a state.  That is unless median age can be made more stationary through the in-migration of younger residents, or as NH has traditionally done, in-migration of residents more in the middle of the age distribution along with their children.  That was exactly NH’s recipe for success for decades even as young people have left the state (a decades long trend in NH), at least until net state-to-state migration slowed in NH, just as it has been slowing nationally for some time.   Between 2010 and 2015, the Census Bureau estimates that about 5,500 more NH residents moved out-of-state than residents of other states moved in, with about 6,700 more moving out of Hillsborough County than moved in, while about 4,500 more residents moved into Rockingham and Strafford Counties than moved out during that time.  The graphic below disputes the notion that NH is no longer a place that people want to locate, they are just being more selective in where they choose to locate in the state.  Examining the differences in population growth and demographic changes among individual communities within these counties  further suggests some of the factors that can contribute to in-migration and inform public policies that seek to address NH’s demographic challenges.  Not all communities experienced the growth or decline in migration characteristic of their counties.  Understanding why  is important to the future of our state and its communities.  It is more than just nearby job opportunities or Hillsborough County would not have seen so much out-migration.  I have written about some of the factors in prior blog posts.

county-migration

Many communities are aging more slowly than the state as a whole and their experiences are illustrative of some of the factors and actions that can influence the age structure of a state or a community. Yet policy discussions about demographics at the state level typically overlook positive demographic trends in many communities in the state.  Below is a chart that highlights how the median age has changed over two decades in just a few NH communities.  The chart shows the median age of each community in 1990, and then incrementally adds how much the median age has changed in each of the following two decades.  There was relatively little difference in the median age of each community’s population in 1990, but especially in the 2000 to 2010 decade, the rate of change in median age varied significantly among the communities.  Communities such as Portsmouth, which had a relatively high median age until 2000, slowed its rate of “aging” dramatically in the 2000s, as did Dover and Manchester, albeit for different reasons and with different demographics.

community-median-age

The point is that if some regions and some communities in NH can rage against the dying of the light, others and maybe even the state as a whole, can as well.  So, while many want to heap NH onto a metaphorical “death wagon,” let me say “but NH is not dead, I think we should go for a walk today”.

A Perfect Labor Force Storm

May 24, 2016

A perfect storm is brewing for the economy and individual businesses in NH and across the country.  Slow labor force growth, the retirement of baby boomers, and weak growth in labor productivity are severely limiting the productive capacity of the nation’s economy.  Between 2010 to 2015 labor productivity in the U.S. increased by just 0.5 percent on average annually, and the labor force by an average of just 0.4 percent.  Since the end of World War II, the combined, labor productivity and labor force growth in the U.S. had never fallen below 1 percent – until 2015 when it was just 0.9 percent. I have written about the the limits labor force growth place on the U.S. and NH economies here and here (and others).  Factors such as the flow of population (state-to-state migration and  international migration), and changes in labor force participation rates will play a large role in determining which states and regions are most affected, but a real possibility exists that the economies of some  states and regions could shrink over time.

Figure 1

A quick assessment of the potential impact of baby boom retirements across the country is illustrated in Figure 1 which shows the ratio of the population in each state that will (or could) be entering the labor force approximately over the next decade – that is individuals currently ages 5-19 –  to those who will (or could) be exiting the labor force – individuals currently ages 50 to 64.   The bars in the graphic that fall below zero indicate states that face more retirements from their labor force than new entrants over the next decade or more.  As the chart shows, the labor force in New England and much of the Northeast will be especially challenged by baby boom retirements as far more individuals will leave than enter the workforce.

In NH, the impact of baby boom retirements will vary greatly by industry.  The Millennial generation will soon be the largest segment of the labor force but their distribution across industries varies greatly.  For this analysis I examined the demographic characteristics of each industry’s workforce in NH.  Figure 2 presents the ratio of early career (age 25-34) to older workers (age 55-64) in major industry groupings in NH.  The graph suggests industries that will be more and less challenged by retirements of the baby boom generation.  Industries that have higher ratios employ more individuals early in their working lives than individuals nearing retirement age.  Several industries stand out for the high percentage of older individuals in their workforce.  Manufacturing is one industry that has had difficulty attracting younger workers and I have written about that issue long ago in this blog, Educational services is another.  Professional, scientific, and technical industries have a surprisingly low percentage of younger workers but an examination of this industry grouping at a more detailed level shows that the legal profession has among the oldest demographics of any industry in the state.

Figure 2

Looking at the age composition of workers in broad occupational groups in NH (Figure 3)  shows how much difference there is across different occupations employed in professional, scientific, and technical industries. The ratio of younger to older workers in the legal profession is just 46 percent, while in computer and mathematical occupations there are many more younger workers and the ratio is 127 percent.

Figure 3

Health care is also a field with a larger percentage of older individuals in the workforce but when the demographics are examined at a more detailed industry level or by specific occupations, it is clear that the industry is bifurcated – with physicians and other health care practitioners having an older demographic while many of the support occupations in the industry that have emerged as health care has become a much larger portion of the economy, have a much younger demographic.

Industry Growth is as Important as Industry Demographics

 The retirement of baby boomers only hints at the industries that could face the most significant labor shortages over the next decade.  Retiring workers may need to be replaced but they may not.  If employment in an industry shrinks or if it grows slowly over the next decade, then labor shortages are likely to be less severe than baby boomer retirements would suggest, even in industries with a higher percentage or older and retiring workers.

 To capture the impact of industry trends on potential labor shortages related to baby boom retirements I combined projected industry growth in NH over the next decade with the ratio of younger to older workers in each industry to produce a supply/demand balance metric.  For illustrative purposes I present the supply/demand calculations for broad industry groupings in Figure 4.  I did the same calculations at a more detailed (50+ industry) level but that level of detail is not amenable to presentation in a single graphic.  It is not possible to know what industries workers entering the labor force over the next decade will work in so these calculations are only rough estimates of potential supply/demand imbalances. As the chart shows,  industries with a relatively older workforce, such as manufacturing, public administration, and utilities, will nevertheless likely confront fewer labor shortages because of slower employment growth in those industries.  Unfortunately, all industries are likely to face shortages in some occupations that are employed and in demand across many industries.

Figure 4

What Can States and Business Do?

The primary shortcoming of Figure 1 is that it is a static representation of the demographics each state’s workforce.  The population and demographic composition of states are not static however.  People move from place-to-place, state-to-state, county-to-county, and country-to- country.  A state or region with substantial labor shortages that is also viewed as an attractive location can see increases in labor supply in response to labor shortages and wages that are rising in response to shortages.   For more than two decades attracting skilled individuals with higher levels of educational attainment has been a key to NH’s economic success, since the mid 2000s however, NH has seen fewer individuals moving into the state from other states.

A popular meme in NH (and in many rural states) is that the state’s labor force challenges are largely the result of young people leaving the state.  But that is a phenomenon that has been occurring for decades in NH as it has in other rural states.   While it plays some role in the state’s labor force challenges, it has not been a key factor contributing to or detracting from NH’s economic performance – either NH’s strong successes of the 1980s and 1990s  or its subpar job growth of recent years. I wrote about who is moving to NH here, the chart below adds who (from an age perspective) left NH during the same recent 5 year time period.

Figure 5

I am not arguing that we ignore the issue of out-migration of youth, but a state budget in surplus along with the “migrating youth” meme is likely to produce proposals for labor supply policies that are likely to be as costly as they are ineffective.  In future posts I will examine the costs and benefits of several labor supply policies directed at increasing the percentage of young people in NH as well as the percentage attending college and remaining in NH after graduation.   NH is not monolithic, some communities and regions have been attracting younger workers and the age structure of their labor forces has not been increasing as rapidly as NH overall.  If policymakers want to attempt to change decades of youth migration trends then these communities are instructive of the types of actions that may or may not help NH capture higher numbers of workers early in their working lives.

Still, migration along with changes in the labor force participation rate among different demographic groups are going to be the primary determinants of the magnitude of NH’s labor force growth in the coming decades. As Figure 6 below shows, net migration from other states (the # moving in versus the # moving out) has been negative in recent years. That is largely the result of a slowdown in people moving to NH rather than a substantial increase in those leaving the state. The chart also shows that net international migration has offset much of the recent loss from state-to-state migration.

Figure 6

International migration of foreign workers into NH has played a critical role in meeting the demand for many occupations in NH.  Overall just under 8 percent of the labor force in NH is foreign born but in some occupations such as computer and mathematical occupations and life and physical sciences occupations, the percentage of foreign born workers in the NH labor force is over 20 percent (Figure 7).

Figure 7

The projections of labor supply/demand imbalances in this post don’t account for  potential increases in domestic or foreign migration but each of these will  play an important role in meeting the demand for labor in the Granite State.  Businesses have little control over net migration to NH so what can businesses do in the face of impeding labor shortages?  Here are some possible strategies to help businesses  meet their labor needs in an era of slow labor force growth:

  • Increase Wages and Pass Costs on to Consumers
  • Expand Automation and Increase Productivity
  • Move to Areas with More Labor
  • Increase Teleworking to Expand Potential Labor Pool
  • Tap the Untapped Labor Pools
  • Provide Incentives to Delay Retirement
  • Rely More on Contingent Workers
  • Recruit (and Train) Discouraged Workers.

These strategies are not available to all businesses or all industries.  Of all, I like providing incentives to delay retirement the best – it is the “revenge of the baby boomers”. More occupations today are less physically demanding and older citizens are healthier than any time in our nation’s history.  Combined, this should allow individuals to work (if they so chose) well beyond traditional retirement years.  For a long while now younger workers have been all the rage.  It is fitting that baby boomers who entered the workforce in numbers large enough to depress wages, and who have seen workplace cultures that increasingly look to appeal to the youngest workers, could see increasing demand for their services at the end of their working lives.

 

The Demographic Trend NH Should Most Worry About

April 25, 2014

I believe that demographics explains two-thirds of everything and with more observers, analysts, and pundits also appreciating the explanatory power of demographics, the use of demography to account for economic, fiscal, and social phenomena has increased dramatically. That also means there are more inaccurate or misleading demographic analyses to sort through to find real insights.

The simple story about how NH is aging rapidly is a nice, if not completely accurate, dramatic story with intuitive appeal that makes it ideal for stimulating PowerPoint presentations as well as marketing and promoting a host of public policies and causes.  Most of the policy prescriptions justified on the basis of demographics will have no impact on the age structure of NH or any other state.   As I have noted before, aging is a permanent, irreversible consequence of low average family size and longer life expectancies in developed societies.   Unlike some states NH’s aging is more a result of its successes than of its failures.   As long as NH continues to have relatively healthier and wealthier (lowering mortality rates) older citizens who resist shedding their mortal coil in a timely manner, and as long as females in the state continue their preference for achieving relatively high levels of educational attainment and labor force participation (lowering birth rates), NH will have a relatively higher median age of its residents.   The youngest states (by median age) in the nation are those with higher birth rates i.e. Utah, California, Texas.   Adding population at age zero has the greatest impact and over the longest time on the age structure of a population.

It is possible for NH to achieve a relatively stationary median age through in-migration; even if the in-migration isn’t concentrated among the youngest age groups (this can be demonstrated mathematically but is not amenable to a blog post).   In fact, that is exactly what New Hampshire did for several decades during its boom years – it added a lot of individuals and families in the middle of the age distribution (30-44), typically two wage earner married couple families (probably both college educated) with children.

I think it is great, although somewhat unrealistic, to  think NH can retain all of its young people in an effort to address the “aging” issue (young people from smaller states and non-metro areas seem to have an understandable preference for locating in areas teeming with a similar demographic).   Even if NH keeps all of its young people in-state after completing their education I don’t think there is anything we can do to keep them from growing older, so as long fertility rates continue to decline the state will only be keeping a somewhat larger percentage of a declining demographic.   But that is not to say that efforts to make the state more attractive to young people aren’t valuable, whether or not they are directed at individuals born in New Hampshire.   In fact, NH should be more concerned with making the state attractive to the skilled individuals with higher levels of educational attainment, of all ages.

Our state’s ability to attract ‘talent” from other states has largely been responsible for NH’s increasing prosperity over the past several decades and that gets to the demographic trend NH should be very concerned with – the continuing decline in our nation’s mobility or rate of inter-state migration.   The recent decline has been attributed to economic conditions but there is a longer-term trend decline in inter-state migration that has been widespread across demographic and socioeconomic groups, as well as for moves of all distances.
National interstate migration rates

Researchers have noted that homeownership and the age distribution of the population (older households move less) can account for some, but not much of the decline, and some have hypothesized that changes in the labor market (reduced job changing and switching of employers) may be playing a significant role.   The chart above shows that both inter-state migration and individual rates of changing employers have been declining. While not indicative of causation, there is a strong correlation between the two variables over time.

NH has seen a larger drop in its annual inter-state migration rate between the decade of the 1980s and the decade of the 2000s than almost all other states. Of course some of that is attributable to the fact that we began with much higher rates (see the drop in other states with high rates of inter-state migration) but it is still an important trend to examine.

State interstate migration change

Examining the relationship between inter-state migration and switching employers with cross-sectional (state level) rather than as a time series, shows a similarly strong relationship, suggesting to me that a more dynamic labor market where individuals are less concerned about moving between employers will maximize NH’s opportunity to increase the net in-migration.   Still, developing a simple predictive model that includes rates of switching employers to explain inter-state migration rates suggests that NH should have seen a much smaller decline in net-migration than actually occurred.   The chart below shows the model’s residuals, or errors in predicting the change in inter-state migration for each state, it shows that NH’s decline in average annual inter-state-migration between the 1980s and 2000s was actually greater than predicted by the model.   At the other end of the spectrum, Massachusetts, while having a declining inter-state migration rate, experienced a much smaller decline than predicted.   A lot of self-serving hypothesis for the above expected decline in NH’s inter-state migration rate will be offered but understanding the real causes are critical for the state’s future.

Residuals of interstate migration
New Hampshire needs to concerned with demographic trends but it also needs to be concerned with the right ones and the ones that it has some ability to influence.   I don’t think the state can or perhaps even should do much about its lower birth and certainly not the lower mortality rates that are key drivers of population aging.   But I do think that achieving a relatively stationary (it will increase it is just a matter of how rapidly) median age is possible. But this will require policies that are concerned with making NH attractive to individuals as well as businesses.   At the local level this is working as evidenced by the differences in growth rates among NH regions, but as the data in this blog suggest, in doing so the state will be pushing against larger national economic and demographic trends.

 

More on Shifting Economic Activity in NH

April 17, 2014

My post on the “Shifting Locus of Economic Activity in NH” back in January generated a lot of interest and emails. That post has more views than any other post on this blog over the past year and half. Admittedly that’s setting a pretty low bar as far as blog readership honors go. Nevertheless I want to thank my family as well as those with an interest in flying, swarming insects and an inability to spell “locust” in their search engines for making it possible.

 

As I noted in my first post on the topic, I believe there are a number of economic and demographic indicators that support my contention about the shift in economic activity. Still, there are some (many?) in the Granite State who disagree. In the spirit of giving the public what it wants and sparking debate, I present another of what will be several posts on the topic.
Some themes essential to my thesis are: that the ability to attract and retain talent (skilled individuals with higher levels of educational attainment) is the critical ingredient responsible for the shifting of activity in NH – as well as the key ingredient for producing a dynamic economy anywhere; and that communities offering amenities and services desirable to “talent” and at a relatively more affordable price are keys to attracting talent. I think price (the ability to offer desirable amenities and services at a relatively more affordable price lower than other communities that offer similar amenities) has been important. But I also think that patterns of economic activity in NH and throughout the country demonstrate that unless your community or state is sitting on a valuable store of fossil fuels or minerals, being cheaper isn’t enough to generate more robust economic activity. One interesting artifact of the debate over local government fiscal policies is the mistaken belief that communities spend more when they contain a higher percentage of lower-income residents. In fact, just the opposite is true – expectations for services, quality, and amenities, along with their costs, generally rise as communities (primarily cities – small and large) generate more economic activity and become wealthier. This typically creates a lot of conflict in communities that are experiencing new economic successes and associated demographic changes and can make sustaining a higher level of economic activity difficult for a community.
Getting back to the evidence that supports my contention about economic activity in NH, the previous decade has not been kind to NH or most states in terms of job growth. I documented the Seacoast’s increasing share of NH’s employment and in key industries in my prior post on the topic.  Here, and in future posts, I will look at some of the demographics of that job growth to support my thesis. The chart below shows the percentage change in jobs among individuals of all educational levels (age 25 and up) in different counties and the State of NH between 2003 and 2012, as well as the percentage of jobs held by individuals with at least a BA degree.

County Job Growth
Similar to my prior post, the chart shows that job growth has been higher in the Seacoast (defined here as Strafford and Rockingham Counties because of data availability while the prior post used data at the community level) than in either Hillsborough County or the State as a whole. More importantly, the chart shows that the rate of job growth in the Seacoast among those with at least a BA degree has exceeded the rates for either Hillsborough County or the State by an even wider margin. Strafford County has seen an especially large increase (largely in Dover – my domicile in the interests of full disclosure) but its much smaller employment base makes larger percentage changes easier to obtain. Again, however, it is not just job growth but the nature of that growth and the shifting of talent that is the key.
The Seacoast accounted for a higher percentage of the state’s net job growth between 2003 and 2012 (chart below). The percentage of the state’s net job growth accounted for by the Seacoast was 70% compared to 46% for Hillsborough County (note the percentages add to more than 100% because some counties had negative job growth during the time period).

Share of States Job Growth
Almost half of the net job growth in NH among workers with a BA degree occurred in the Seacoast. Hillsborough County still has a larger percentage of job holders in the state with a BA degree or higher (37% to 31% in the Seacoast) but that percentage has slipped by almost 1% over the time period, while the Seacoast’s percentage has increased by 1%. Still even shifts occurring at seemingly glacial speed are very powerful. I suppose it is possible that the Seacoast has just been more successful in adding jobs which overqualified BA’s are filling. Based on my initial examination of job growth by industry, I don’t think that accounts for the relative differences, but in future posts I will examine that and other possibilities.

Demographic Demise – The Sequel

June 17, 2013

Those well known demographers at Governing Magazine are likely to ignite another round of hysteria about NH’s aging population with their recent article highlighting increases in the median age of state populations.  I do not plan to go “gently into that good night” and for the past decade, as I hurtle toward my dotage,  I have “raged against the dying of the light” by highlighting why, at least in NH’s case, demographic trends are far less apocalyptic than popularly portrayed.

I can’t say it enough, I  believe that demographics explain two-thirds of everything.  Current trends will present the U.S. and NH with many challenges but we will be infinitely better able to confront these challenges with an accurate understanding of the forces that are creating them.  Too often demographic data is tortured to yield conclusions in support of some issue or cause rather than analyzed to reveal the real underlying  forces affecting the economy and society.  If we think the state’s population is aging because of zoning restrictions or because contraceptives are too widely available,  or because there aren’t enough skateboard parks or coffee shops then policies designed to manage the changes resulting from demographic forces are going to be profoundly ineffective.

I first made the arguments below  about a decade ago and despite the protestations of those who have horror stories to tell and books and documentaries to sell, nobody has shown why they are inaccurate.

Aging is a permanent, irreversible consequence of low average family size and longer life expectancies in developed societies.  Because NH has both wealthier and healthier older citizens (on average) than does the US, we expect greater longevity.  NH also has among the lowest fertility rates of any state in the nation and this, more than anything, accounts for our increasing median age relative to the US.  The chart below shows how much lower and how much faster the fertility rate among women of child bearing years has been declining in NH compared to the U.S. average, along with how much lower NH’s mortality rate is than is the U.S. rate.

Fertility and mortality trendsUnlike the brother and son of former U.S. presidents I don’t know anything about how fertile women of different races or ethnic origins are but I am probably just as prone to putting my foot in my mouth, so here goes:  “Fertility rates,”  or the number of births per 1,000 women in child bearing years does vary  by the educational attainment, labor force status, and as is evident in the state of Utah, even the religious beliefs of women and their partners.  Fertility rates largely account for NH’s rising median age, just as they do for Vermont and Maine.  Fertility almost always has a more powerful effect on the age structure of a state’s population than does either migration or mortality because all of the population changes that it generates arise at age zero and work their way through the age structure for 70+ years.  The chart below shows how much lower is NH’s fertility rate among women age 15-44 than is the rate in most other states in the nation.  The chart also largely explains why Utah has the youngest median age of any state and why NH, VT, ME and other New England states have older median age populations.

State Fertility RatesWomen in NH (as well as in most New England states) have higher educational attainment (on average) and are more likely to be in the labor force than are women overall in the U.S..  Both of these factors are associated with lower birth rates. Much of NH’s increase in college educated workers is the result increases among women and this has produced substantial economic benefits for the state and its residents.

For two decades NH has added large numbers of families with children and lost younger people who attend college or otherwise leave the state in young adulthood.   In recent years a weak economy and a housing market that made it difficult to both sell and buy a house has greatly curtailed migration into NH.  Mover’s to NH over the past several decades are more likely to be a married couple family age 30-44 with children and  likely to both be college educated and working.  That demographic doesn’t do a lot to lower the median age of a population but it can help keep the median age stationary in the middle of the age range.  However, economic conditions not only have curtailed state-to-state migration, they have also lowered fertility rates, as income and employment trends appear to have given  pause to more families considering expansion.   Across the nation state-to-state migration has been lower than at any time in a half century and fertility rates started to decline in the U.S. (after rising in a few consecutive years) as the last recession took hold. 

The long-term trend in NH is for a gradually increasing median age that should be rising at about the same rate as the much of the U.S..  The state is not even close to the top among state on the percentage of its population age 65 or older and that fact alone should eliminate some of the more simplistic explanations for why NH’s median age has been rising faster than the U.S..  Because of our low fertility and mortality rates, NH is more dependent upon in-migration to offset trends that would produce more rapid increases in median age than seen in much of the country.  Over the past several years those migration trends haven’t been favorable.  If the economy and housing markets recovery continue and NH focuses on the right policies (hint – zoning regulations aren’t it) this should be a temporary  phenomenon, but that doesn’t mean we aren’t going to get any older, it just means that we can keep the median age at a more stationary point in the middle of the age distribution.  The middle has gotten a pretty bad name in recent years, but demographically at least, its not at all a bad place to be.

Educational Attainment, Economic Prosperity and Fiscal Reality

March 4, 2013

I write and speak a lot about the importance of demographics to community and regional prosperity.  Over the past several years I have written and spoken about my belief that communities wanting to increase the number and quality of employment opportunities available in their town increasingly need to recognize the importance of being an attractive place for skilled individuals with higher levels of educational attainment.  Employers in emerging and growing industries  locate in areas where the pool of talent (skilled, well-educated individuals) is “deep” or growing.   A community can still see employment growth even if it doesn’t have a lot of skilled, well-educated individuals if it is located in a region that does have enough of them but the impact on and benefits to the community will be very different.

It is hard to empirically test the importance of skill levels and educational attainment to job growth in individual communities but anyone involved with the location and expansion decisions of employers knows how important the availability of a skilled and educated labor force is.  Because the occupational needs of employers in different industries varies greatly, I, and others, often use the percentage of the population age 25+ with at least a bachelor’s degree as a surrogate for trends in the education and skill-level of the workforce in a community or region. It’s a good way to labelled an elitist, at least by those who don’t know anything about you.  I don’t think only college graduates can get good jobs but it is clear to me that trends in the educational attainment of the population of cities and towns is a pretty good indicator of how the economic fortunes of a community are changing. I’ve tested the relationship statistically and found that there is a  relationship between the change in the percentage of individuals age 25+ with at least a BA degree in a community and employment growth over the past decade.  There are a lot of factors that influence employment growth but over past decade communities that have had larger increases in the percentage of individuals with high levels of educational attainment generally have had better job growth (or at least less negative growth).  The relationship narrowly missed statistical significance when tested on NH’s 40 most populated communities.  Since the recession in the early 2000’s, there has been virtually no private sector job growth in NH (primarily because the last “‘great recession” wiped-out gains from the middle of the decade).  The chart below crudely divides NH’s larger communities into quartiles according to the change between 2000 and 2010 in the percentage of their population age 25+ that has at least a BA degree and the mean change in private sector employment between 2003 and 2011.  One caveat, the figures for 2010 used to calculate this is based on the three-year average of American Community Survey values and smaller communities have larger margins of error in the survey results.  It is just one of the challenges in documenting the relationship between demographics and economic performance at the community level.  Nevertheless, I think  the data point to a relationship were towns that are seeing increasing levels of educational attainment among their population are performing better economically than than those that are seeing less of an increase.

job growth and ed attainment change

It also says a lot about how the character of a community might be changing.  I live in city that has seen a significant increase in the percentage of its population with a BA degree or higher over the past two decades.  That change has contributed to changing expectations of the community (the type of services and amenities it offers).  That type of change creates a clash between the old and new that has and continues to characterize many communities.  In many ways I believe local tax cap debates are more about demographic and socioeconomic changes than they are about economics and fiscal policies.  But I digress.

Skilled individuals with higher levels of educational attainment have the most economic opportunities and they are the most mobile.  I think keeping and attracting skilled individuals with higher levels of educational attainment is an increasingly important economic development strategy for communities.  Looking at changes in educational attainment between 2000 and 2010 among NH’s largest communities shows some interesting patterns.  Not surprisingly, some of the communities that have done the most to restrain expenditures have seen the smallest increases in educational attainment levels (some towns like Durham had such high levels – 77%  – they have no way to increase much).

ed attainment change by town

Spending liberally is never a good thing but providing the services and amenities desired by skilled and educated individuals and families at a price (in terms of local taxes) lower than other communities is a good way to accumulate the talented workforce that can increase real prosperity in a community.  Just adding skilled and educated individuals isn’t enough for employment growth, particularly if a community doesn’t want to be a center of employment or is otherwise inhospitable to employment growth.   I don’t think a low tax price alone is enough to attract talent and I don’t think providing amenities and services without regard to price is enough either, but too often never the twain shall meet in striking a balance between prices and  services and amenities and longer-term community development objectives.  I don’t know many local budgets that can’t be cut but unfortunately the cuts usually come at the expense of those services and amenities most likely to help a community attract or retain individuals with the most economic opportunities and choices of where to locate.  When I say or write these things I risk being labeled a big spender or liberal.  In reality I am just documenting trends that seem pretty clear to me.  Nevertheless, my advice to others is never bring data to an ideological fight if you want to escape unscathed.  In an age of austerity, spending decisions need to consider both the current  fiscal reality as well as the longer-term implications for the economic prospects  of  a community.

The Coming Matriarchy in the U.S.

February 12, 2013

I received a great comment/question  about my post “Why Can’t a Man Graduate More Like a Women” asking about the potential impact of Title IX on the rise in the percentage of female college graduates relative to male college graduates.  I didn’t have a good answer or much empirical evidence then but as is my custom I responded as if I did.

Title IX is most often identified with efforts to equalize opportunities to participate in intercollegiate sports for women but its real purpose was to prevent discrimination in education based on sex.  Title IX is a portion of the Education Amendments of 1972 and is also known as the Equal Opportunity in Education Act, it said:

No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal financial assistance…

Rules for its implementation were finalized in 1975 and since it was implemented the number of young women attending college on a full or part-time basis has increased by 138% compared to 47% for young men.

Male Female Enrollment Growth

Since the percentage of young women and young men hasn’t changed much since 1975, the differential growth rate is attributable to increasing enrollment rates for women.   I can’t say  how much of this is attributable to Title IX, a lot of things began to change for young women in the 1970s and female enrollments jumped between 1970 and 1975 as well (see chart below).

Male_Female Pct of Enrollment

Women now comprise about 57 percent of all undergraduate students in this country.  The growth trend seems to have stabilized somewhat in recent years – recessions tend to limit employment opportunities for young men more than for young women and this can prompt greater college enrollment among young men.

Male_female Unemployment Rates

A lot of progress has been made by women in this country since 1975 but it is hard not to see the association between the growth in female college enrollment and implementation of Title IX.  I am sure some readers will note Title IX’s shortcomings and more may object on principle to anything that seeks to equalize opportunities among our citizens.  But ideology often causes temporary or permanent blindness.  I’ve noted my interest in gender issues as the father of daughters and I blog frequently about gender and economics (select  the “gender” category to see some) but the issue has profound implications for the future of this country;  economic, political, as well as social.  Women are increasingly contributing to the quality of  “human capital” in this country.  There are now more women working in New Hampshire than men.  It is a great development that would be even greater absent the disturbing trends among young men.

From a political perspective (isn’t everything political these days?) the feminization of the workforce as I have called it (not pejoratively) along with the relationship between educational attainment (college graduates) and voting for Democratic candidates should prompt leaders of the Republican Party in this country to consider their relatively lack of appeal to women, especially younger women because as I see it, and as my daughters no doubt hope, it won’t be long before women will rule this country.


%d bloggers like this: