Crosstabs - A Closer Look at the Economics & Demographics of Colorado
Colorado’s population is getting older. Between 2010 and 2015, Colorado’s growth in its 65 plus population was 3rd fastest in the US at over 29%, compared to 4th place in overall growth (8.5%). In part 1 of this series we looked at why Colorado is aging so quickly. Now let’s take a closer look at what it means for our state.
The aging of Colorado is a significant change for two reasons: First, Colorado currently does not have a large share of its population over 65 and second, the Baby Boomers in Colorado number over 1.3 million in 2010 and will continue to age into the over 65 cohort over the coming decades.
This graph shows projected growth out through 2040, with the most significant growth (61%) occurring right now, between 2010 and 2020. You can see it slows as we near 2040, but still remains sizeable.
Chart: Forecast for the Population 65+ in Colorado
What does it all mean?
The aging of the population has broad implications for our state in many areas including labor force, economic development and housing just to name a few. The 65+ segment has a big impact on our economy, and they tend to buy, work, live and utilize services differently from other age groups. The following five topics have been identified by the State Demography Office as potential issues to keep an eye on.
A tightened labor market. Baby Boomers make up 37% of the labor force and over the next 15 years approximately 1 million workers will age out of the workforce, even with the trend of workers staying in the labor force longer. Forecasts predict the largest growth in leavers from the labor force will occur around 2020-2022. To put these numbers in perspective: Between 2010 and 2025 the annual number of leavers is expected to increase by 74% compared to only a 27% increase in the labor force over the same time period.
Economic impacts of retiree spending. It is estimated that spending of savings, pensions, 401Ks, etc. by retirees supported 137,000 jobs in 2010, or one job for every 4 people over the age of 65. There is enormous growth potential for products, services, entertainment, housing etc. to serve this market, which is expected to increase by 6% per year between 2010 and 2020 followed by 4% per year from 2020 to 2030.
Keeping up with housing needs. Housing preferences for the 65+ depend greatly on age and disability, as well as proximity to health services and amenities, costs, transportation, and family. If a community has a shortage of homes with accessibility features, or few public transportation options, it will have a hard time attracting and retaining the 65+ population.
Meeting health care demand. The older population requires more health services, and this increase in spending creates growth within the healthcare industry. It will be important for the state, as well as individual communities, to ensure they can attract and retain a skilled workforce to meet these demands.
Public finance concerns. Those in retirement tend to pay less in taxes both because they’re no longer working, and because they’re buying fewer taxable goods. With the aging of our population, there is an expected decline in per capita tax revenues to the state and many local governments- although it’s important to note that an overall decrease in total tax revenues is not expected due to aging.
While Colorado is still years away from fully feeling the economic implications of our aging population, it’s important that we take the time to look ahead and understand the changes that are taking place. Colorado’s population is aging, and with that comes many economic and social changes that need to be addressed. Colorado and its communities must be ready to confront both the challenges and opportunities this growth generates.
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Data sources: US Census Bureau and State Demography Office