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Provisional 50-Year Demographic and Economic Projections for the State of Utah, 2015-2065

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Provisional 50-Year Demographic and Economic Projections for the State of Utah, 2015-2065 Policy Brief October 2016 The Beehive Shape: Provisional 50-Year Demographic and Economic Projections for the State of Utah, 2015-2065 Authored by: Mike Hollingshaus, Ph.D., Emily Harris, M.S., Catherine Jeppsen, Ph.D. & Pamela S. Perlich, Ph.D. Table of Contents Introduction Introduction ..........................................1 The Kem C. Gardner Policy Institute has produced provi- Scenarios .............................................2 sional long-term demographic and economic projections Interpreting the Data .................................3 for the State of Utah. This is a significant milestone as we Overall Population Growth . 4 continue our research efforts to produce the state’s offi- Components of Change ...............................4 cial long-term, state- and county-level projections by July Age Composition of the Population ...................6 Households and Employment . 9 2017. The Utah Legislature funded this work to enhance Conclusion ..........................................12 the state’s demographic data and decision support. These projections will be used to inform education, trans- Appendix: Assumptions and Scenarios ...............13 portation, water, and other long-term planning endeav- Endnotes ............................................15 ors. By mid-summer 2017 we will revise these projections and add county-level specificity. Highlights These 50-year state projections illustrate continued pop- ulation growth and a range of future demographic and • 5.5 million in 2065 – Utah’s population is projected economic possibilities for the Beehive State. The shape to increase from approximately 3 million in 2015 to of Utah’s likely future demographics can be summarized 5.5 million in 2065. by a simple chart overlaying two population pyramids. Figure 1 outlines Utah’s shifting age structure. It com- • Median age – Utah’s median age is projected to increase by about nine years, rising to 39.5 years pares population counts by sex and single year of age in 2065. The shape of the population pyramid is over time. In Utah’s past, we have typically seen a cone projected to change from a cone to a beehive shaped pyramid with a large number of children at the shape as a result of declining fertility and increasing bottom, a fair amount of working age adults in the mid- life expectancy. dle, and then a quick tapering off once we get into the retirement ages as people start to die. However, the 2065 • 65-and-older population – The share of the pyramid tells a different story. Instead of a cone, we see population ages 65 and older is projected to more of a beehive shape, with much more even distribu- double over the next 50 years to 21.3 percent. tions of children and working age adults, and many more individuals living into the older ages (including 100 years • School-age population – The population ages 5-17 is projected to increase, but compose a smaller and above). share of the population than it does today. Annual The figure is only a succinct summary, and the fully-de- increases in this population are projected to exceed tailed projections provide a clear roadmap of what Utah’s 9,000 through 2018, but are projected to remain demographic future may look like given the likely trends below 9,000 every subsequent year. of steady economic growth, declining fertility and Kem C. Gardner Policy Institute I 411 East South Temple Street, Salt Lake City, Utah 84111 I 801-585-5618 I gardner.utah.edu AN INITIATIVE OF THE DAVID ECCLES SCHOOL OF BUSINESS Figure 1 Utah Population Pyramid: 2015 and 2065 100+ Male - 2015 Female - 2015 96 Male - 2065 Projection Female - 2065 Projection 92 88 84 80 76 72 68 64 60 56 52 48 44 40 36 32 28 24 20 16 12 8 4 0 40,000 30,000 20,000 10,000 0 10,000 20,000 30,000 40,000 Source: Kem C. Gardner Policy Institute 2015-2065 State Projections Scenarios increasing longevity. This roadmap provides a solid tech- nical foundation for policy and infrastructure planning as well as further analytic work. These projections are produced using the Utah Demographic and Economic Model (UDEM), which has We cannot forecast the future. Rather, our intent is to pro- been designed and built by researchers at the Kem C. vide a reliable and comprehensible framework for a rea- Gardner Policy Institute. UDEM is essentially a custom- sonable range of likely alternative demographic futures ized demographic cohort-component model in which for Utah. We use our custom-built long-range projection the population changes over time through aging, births, model to explore how alternative assumptions about the deaths, and migration.1 Plausible ranges for expect- future of key demographic and economic drivers shape ed fertility, mortality, and migration are entered into population outcomes. So, even though we cannot exact- the model, generating time paths for upper and lower ly predict the future (especially as uncertainty increases bounds of expected future populations. This approach over time), this work permits us to identify reasonable provides a reasonable portrayal of Utah’s future popula- bounds for the shape of Utah’s future demographic land- tion possibilities. scape. UDEM is designed to incorporate state and regional We begin with a general overview of our scenario work economic conditions (e.g., labor force and employment and results, including a brief explanation of the technical dynamics), special populations (e.g., higher education approach and factual basis for the analysis. The bulk of and correctional facilities), and multiple types of migra- the document describes our baseline scenario, including tion (e.g., retirement, labor market, LDS mission service). a discussion of methods, data, and assumptions. While accounting for this additional information in pop- ulation projections increases data demands and resourc- es, it offers the advantage of the capability to produce scenarios that incorporate contextual or policy changes. INFORMED DECISIONSTM 2 gardner.utah.edu Examples include policies related to family, business, Figure 2 health care, education, and others. In this way, we imple- Total Population: Low, Baseline, and High Scenarios ment the vision of the Kem C. Gardner Policy Institute— 6,500,000 6,234,812 to provide policy makers, business leaders, and the public 6,000,000 with the best possible information to make informed 5,500,000 5,526,409 decisions. 5,000,000 We have produced three sets of projections for high, 4,618,784 4,500,000 baseline, and low scenarios of population growth by sin- gle year of age (up to 100 and above) and sex. The 50-year 4,000,000 projections extend from 2015 to 2065. The baseline sce- 3,500,000 3,000,000 nario incorporates assumptions that embody Utah’s most 2,996,755 likely future for fertility, mortality, migration, labor force 2,500,000 dynamics, and economic growth. The high and low sce- 2,000,000 narios are constructed using reasonable upper and lower 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 bounds for the forces that most strongly shape Utah’s Source: Kem C. Gardner Policy Institute 2015-2065 State Projections population. All three scenarios result in continued pop- ulation growth and an aging population. The scenarios Table 1 were defined by different assumptions regarding Utah’s Utah Total Population Million Markers by Year and Scenario future total fertility rate, life expectancy, and economic growth. The details of these assumptions are discussed in 4 Million 5 Million 6 Million the Appendix, but are briefly summarized here. High Scenario 2031 2046 2062 The three scenarios are defined as follows: Baseline Scenario 2034 2054 -- Low Scenario 2040 -- -- • The baseline scenario generates population growth Source:Source: Kem Kem C. GardnerC. Gardner Policy Policy Institute Institute 2015-2065 2015-2065 State Projections State Projections by assuming a moderately decreasing fertility rate, Purposeful policies and investments as well as unantic- a moderately increasing life expectancy, and mod- ipated events, such as financial crises, natural disasters, erate trend employment growth. We consider this wars, and significant policy changes, can result in dif- to be the most likely scenario. ferent projection outcomes. The UDEM model has been • The high scenario generates a larger population by built to incorporate and analyze some different alter- assuming a temporary increase in the fertility rate, native futures as they affect the major drivers of demo- a higher life expectancy, and more rapid employ- graphic change. Unknown change and uncertainty are ment growth. inevitable realities of life and projection modeling, but • The low scenario generates a smaller population by with this type of research we are able to identify a range assuming a more rapidly decreasing fertility rate, a of possible futures given trend changes in fundamental slight increase in life expectancy, and lower rates of demographic drivers. 2 employment growth. Interpreting the Data Figure 2 shows the overall total population projected under the different scenarios. The results are also sum- marized in the sequential million markers for the total Population projections are modeled estimates of the population (see Table 1). The baseline scenario reaches future population based on assumptions about the a population of 4 million in 2034, with the high scenario future patterns of births, deaths, and migration. These reaching that marker 3 years earlier (2031) and the low assumptions are based on rigorous analyses of historical scenario reaching that marker 6 years later (2040) than and current trends and state-of-the-practice estimation the baseline. As time progresses, the scenario differences techniques. Although the assumptions made here are become more pronounced, with the high scenario reach- grounded in theory, research, and historical trends, uncer- ing a population of 5 million in 2046, the baseline reach- tainty about the future is an inescapable reality of life. ing it eight years later in 2054, and the low scenario never An exact prediction of the future remains beyond our reaching 5 million during the projection horizon.
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