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As populations change over time, the demand for government services can fluctuate. For example, if a place experiences rapid growth in children under the age of 18, demand for education services will rise. Conversely, the rise in the population age 65 and over will drive demand for healthcare services.
The U.S. government’s largest sources of revenues, individual income taxes and payroll taxes, together form about 64% of all government revenues and are generally tied to economic activity generated by those actively working in the economy.
In our last exploration of population data, USAFacts showed how diverse U.S. states are when it comes to age groupings. This piece will specifically narrow in on how three clusters of our population are changing across the states: those who are working age (18-64), those who are children (under 18), and those who are age 65 or over.
Demographers, economists, and government officials keep an eye on these ratios as they tell a story about the demand for specific types of government services. Significant imbalances of populations in either direction are often linked to complicated social issues. Notably, countries like Japan have experienced greater than a 10 percentage point increase in the population older than 65 since 2000, placing significant burdens on their social safety net and healthcare systems.
So how do U.S. states fare in terms of age-related demographics?
The typical U.S. state in 2018 had roughly 61% of their population between the ages of 18 and 64. Just 18 years prior, the average state had roughly 62% of their population in that age grouping. The District of Columbia, Massachusetts, and Colorado have the largest shares of their population in this age bracket, while Idaho, South Dakota, and Hawaii have the lowest shares. The relatively small change among the working-age population masks a more significant demographic change in the young and old populations highlighted in the next sections.
Between 2000 and 2018, only seven states (or equivalencies) saw their Working Age population increase. The District of Columbia, Rhode Island, Massachusetts, Connecticut, California, Pennsylvania, and New York experienced modest increases in the proportion of their population that is working age. No state experienced more of an increase than the District of Columbia which increased by about one percentage point. Forty-four other states all experienced declines in their working-age populations, and seven states experienced declines of three percentage points or greater including Virginia, West Virginia, Wyoming, South Carolina, Alaska, North Carolina, and Hawaii.
At the turn of the Millennium, the typical state had just 13% of their population age 65 or older. In 2018, the typical state had 16% of their population in that bucket and over that same period the typical state experienced a 4 percentage point rise in their elderly population. As a proportion of their population, Maine, Florida, West Virginia, Vermont, Montana, and Delaware have the largest shares of their population that are aging into retirement. Conversely, Georgia, Texas, the District of Columbia, Alaska, and Utah have the lowest proportions of this population.
Since 2000, the proportion of the population that is elderly grew in every state (or equivalent) except the District of Columbia. Seventeen states experienced a five or greater percentage point rise in the elderly population, with Vermont, Maine, New Hampshire, Alaska, and New Mexico experiencing the most significant rise in their elderly population. Two states saw their over 65 populations double since the turn of the Millennium: Alaska and Nevada.
On average, the typical state in the year 2000 had about 26% of its population under the age of 18; in 2018, that figure dropped to 24%. Since 2000, no state experienced an increase in the under 18 population. Eighteen states saw this population drop by less than a percent, while five states (New Mexico, Maine, Vermont, Alaska, and New Hampshire) experienced a drop of four percentage points or greater.
Here’s a look at how the under 18 population changed in comparison to the 65+ population.
When viewed through the lens of regions, a more noticeable clustering of states emerges when both young and old are considered. The American West stands farthest apart from the Northeast with a more rapid increase in both the under 18 and the over 65 populations (hover over a region to highlight in the chart above). The Midwest and the South are experiencing growth between the West and the Northeast. Alaska stands apart as a very small population state with very rapid over 65 expansion whereas Nevada breaks the mold with outpaced growth in both categories. The District of Columbia shows up at the top left with more rapid under 18 expansion but less than normal growth in older residents. Rhode Island bucks the trend with a shrinking youth population and a lower than typical older population increase.
With every state experiencing declines in the population share under the ages of 18 and increases in the population older than 65, it is reasonable to expect all parts of the U.S. government to have to respond as demand for public services shift with demographic changes. Nevertheless, no state has yet experienced the kind of dramatic shifts seen in other countries like Japan. While the overall share of the working age population hasn’t changed much since 2000, that trend cannot continue as the share of the American population is composed of fewer children and more retirees.
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