Archive for the ‘in-migration’ 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”.

Who is Moving to NH and Why Does it Matter?

October 5, 2015

A lot of time and energy is expended fretting over young people and recent college graduates from New Hampshire moving to other states. It would be nice if many young people remained in the state but keeping a larger percentage of a shrinking demographic is, at best, a small part of New Hampshire’s longer-term demographic and economic challenges. New Hampshire, along with the rest of Northern New England has been a net supplier of 18-24 year olds to other states for decades and it that hasn’t changed much in recent years. It isn’t exactly a trade but what NH got in return, that is until the mid-2000s to the mid-2010s, was a lot of 30-44 year olds with high levels of educational attainment. The movement of individuals and families into New Hampshire during their early and mid-career years was what set New Hampshire apart from the rest of New England and the Northeast and it is what provided the fuel for the extraordinary rise in prosperity in the state from the 1980s to the early 2000s.

If NH becomes more attractive to young people that is great, but with the lure of several great and exciting cities so close, I don’t think our appeal to the youngest entrants to the working world is likely to be fundamental strength of our state. Still, I say go for it, it can’t hurt unless it takes our state’s “eye off the ball” of what contributed so greatly to our state’s prosperity. Take whatever actions to make our state a “hipper” place for young people as long as those actions also make NH even more attractive to those we have already proven we can attract and retain. Attempting to address whatever shortcomings NH has in the eyes of young people is a noble goal but no entity thrives for very long if it spends most of its time addressing its failures instead of feeding its successes. In this case, NH’s success is its demonstrated appeal to early and mid-career individuals and young families. After a decade of limited net in-migration from other states (more people moving in than moving out) and even net-out migration, in-migration to NH from other states is once again rising.

I confess to being a huge fan of the middle of the age distribution. Attracting those in the middle won’t give a state the lowest median age but it does help keep a state’s median age relatively stationary in the face of declining birth and mortality rates. More importantly, the benefits that individuals age 30-54 confer on an economy are much more important than are the benefits conferred by the 18-25 crowd. A younger workforce has been in favor since the 1980’s and capturing recent college grads is an obsession in NH and in many states, but in reality the strong economic growth that characterized the US and NH economies during much of the 80s and 90s, was, in part, the result of an increasingly high percentage of workers age 35-54, and a corresponding decline in the % age 20-34. In the aggregate, workers age 35-54 are our most productive. They have more accumulated expertise, knowledge and training than younger workers, at the same time they work more and are in their “peak” earning years. The high % of workers age 35-54 during the 1990s likely played a significant role in boosting our national and state productivity. The 35-54 age group works and earns earn more than older workers, boosting overall income levels and government revenues, at the same time this age group invests and saves more than the 20-34 age group, contributing to lower inflation and interest rates at the national level. As the chart below shows, NH’s period of strongest economic growth (as well as the nation’s) coincides with an increasing % of workers age 35-54.

Age comp of labor force

So, as I hurtle relentlessly toward the dying of the light I say three cheers for middle-age and let’s hope NH keeps attracting skilled, well-educated individuals and families in their peak working and earning years. My analysis of the last five years of NH data from the Census Bureau’s “Current Population Survey” suggests that is what is happening, boosting the prospects for accelerating prosperity in NH along the way. I examined the characteristic of some 22,000 individuals from the survey, over four years, who indicated that they had moved into NH during the prior 12 months period (I also examined the characteristics of those who moved out but that is another post). The age composition of in-migrants age 18 and older is presented in the chart below. It shows that the largest group of in-migrants was ages 25-34, representing 44 percent of the adult age migration to NH during the 2011 to 2014 time period. Another 25 percent were in the larger age 35-54 age group. New Hampshire will do quite well thank you very much if it can attract more of these individuals than it loses to other states each year. Net in-migration to NH resumed in 2013 and anecdotally appears to be accelerating in some parts of the state.

age comp of in migrants

As encouraging and important as the age composition is of in-migrants to NH is, the educational attainment of in-migrants is perhaps even more so. On that front there is even more encouraging news. About 55 percent of in-migrants age 25 and above hold a post secondary degree, with 47 percent holding a bachelor’s degree or higher. This is significantly higher levels of educational attainment than in the current population of NH residents age 25 and above.
ed attain of in migrants

I am waging my own private campaign (with limited success) to keep three of NH’s best and brightest young people in our state. Efforts to attract well-educated, early career and middle-aged residents aren’t nearly as exciting as campaigns to entice the young and the restless to remain or migrate to New Hampshire, but they are likely to pay greater dividends over the long-term for New Hampshire.

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.

 

What’s Behind NH’s Recent Net Out-Migration?

November 1, 2012

I’ve written often about how important the ability to attract skilled, well-educated individuals is to NH’s past and future economic success.  Appropriately, there is much concern over NH’s recent population losses resulting  from movements of residents into and out-of the state and what it says about NH’s relative attractiveness.  Not surprisingly, that concern  results in many simplistic, inaccurate, and analytical flawed explanations for the patterns of migration to and from NH.  I don’t have a book, video, seminar, or anything else to sell that depends of any particular explanation for NH’s migration patterns so I will let the data , as it becomes clearer, shape and evolve my theories on the phenomenon.

Here is the basic scenario:  NH has traditionally been a magnet for residents moving from another state (most prominently from  another Northeastern state – especially MA). During the past decade NH has attracted less net in-migration from other states, especially during the second half of the decade, culminating in net out-migration at the end of the decade.  The resulting concern by many (including me) is that NH may be losing its fundamental attractiveness relative to other states.  Because NH has relied on in-migration to fuel growth in “human capital” and the economy, this would imply very bad things about the future of our state.  I worry a lot about NH’s attractiveness  but my answer to the question of whether the state has lost its attractiveness is: “no…….not yet“.   Lets look at migration to and from the state during the recession (chart below). During the recession the patterns of the past several decades were largely the same – albeit with different magnitudes.  NH gained and lost a  lot of residents from other Northeastern states, and smaller numbers from other states in the South and West.

The difference in recent years has been that the positive net flows to  NH have been smaller for states that traditionally send NH a lot of residents (the Northeast), while the states with whom NH traditionally has net negative outflows have been larger (largely states in the south and west).   But is this a sign that NH is now less attractive?  I don’t think so (yet) and here is why. Since the housing and financial crisis and subsequent recession, the U.S. Census Bureau reports that state-to-state movement in the U.S. (on a % basis) has been about as low as it ever has been.  One reason for that,  many economists believe, is the fact that there were fewer places to move to that had stronger economic growth that often drives migration.  But another important factor has been the phenomenon of “housing lock.”

Because of the housing market bust and subsequent housing equity, credit and financial issues, both the selling and buying of homes were disrupted or impossible for large numbers of homeowners in NH and across the country.  That has especially profound impacts on net migration to NH.  I can’t explain in detail here, but migration patterns in NH indicate that the state has been especially attractive to and a magnate  for  30-44 yr. old, two wage-earner married couple families with children.  To move to NH they typically have to sell a house in their  native state and buy one in NH.  Each of those was a lot more difficult at the end of the last decade.  I believe this  reduced our core demographic of  potential  in-migrants.  At the same time, the housing market crash had less of an effect on the ability of the young, and non-homeowners to move from state-to-state.  This is the demographic group that traditionally has shown net out-migration from NH.  So the groups most likely to choose NH were most constrained from doing so during the last half of the 2000s, while the groups most likely to leave NH were not constrained from doing so by “housing lock” or other housing market issues.  The result – much lower rates of net in-migration to the state.  This explanation doesn’t account for all of the recent decline in net migration to NH, but it surely has played a significant role in the trend.


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