Posted tagged ‘migration’

“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”.

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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.

 

There’s No Place Like Home (Your Home State)

April 29, 2013

I was surprised by data on the enrollment migration of high school graduates who enter  four-year colleges immediately or shortly after graduation from high school.   As the chart below shows, in most states, a very high percentage of students enrolling in four-year colleges enroll in a school in their home state.

Student Migration

This would not be  unexpected if it were data from 1920 but a lot has changed in the world that should exert a fairly strong influence on the enrollment decisions of high school graduates.  First, anything that reduces the time, cost, or difficulty in travel should contribute to an increase in the willingness of students to travel further to attend college.  The real cost of travel (measured as dollar per airline mile) has fallen dramatically over the past several decades.  In addition, the increased ability to communicate over longer distances and at ever lower prices should also reduce disincentives to enrollment over distances.  Perhaps even more importantly, the information available to students and their parents about schools (including video tours, rankings, and all types of detailed data), should also reduce the barrier of distance from home  to enrollment in a college.   In addition, colleges have more information about students and an increasing ability to target potential students irrespective of their distance from campus.  States with a low percentage of students enrolling in a college in their homes state (NH, VT, CT, MD, DE) all have many college choices in nearby states so many of the barriers that might influence enrollment distance don’t really apply.

We in NH fret a lot about the percentage of students who choose to enroll in an out-of-state college, but almost 90 percent of NH grads enrolling in a four-year institution enroll in a college in New England and on balance we are a slight “net-importer” of college enrollees.   There are tremendous economic and public policy implications related to the supply of young college graduates but we need to be careful that in analyzing the issues we use appropriate metrics.  I am not convinced that in NH’s case, the percentage of students enrolling in-state is a good one.

I need to look at a time series of this data to get a better handle on some of the contributing factors to these data.  For now the only conclusion I can draw is that college-age children simply care too much about their families to want to venture far from home – at least that is want I have wanted to believe for the past several years.

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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