Earlier this week, I wrote about the prospects of a new baby boom. 

The data behind the forecast is persuasive, in my view. Very few people saw the baby boom of the 1950s coming. Few will see the next demographic shift coming. 

But what if the baby boom forecast is wrong? That's entirely possible.

The current forecast among demographers is that America's population will age for the next many decades. Our total population will still rise -- and importantly, our working-age population will keep marching higher, too -- but the average age of America's total population is projected to rise over the years. 

Let's look at the numbers. 

Ignoring immigration, population growth is a function of two forces:

  • A birth rate of more than two children per female
  • A declining mortality rate (rising life expectancy)

For most of modern U.S. history, population growth was propelled by the former. From 1980 to 2012, fully 70% of U.S. population growth came from those under the age of 50.

But things changed. The birth rate fell, and life expectancy is rising. If the baby boom story is wrong, and that trend continues, as the Census Bureau currently projects, population growth in the coming decades will be driven by growing numbers of older Americans.

Here's a simple way to show the shift, using the Census Bureau's population forecast:

Period

Total Population Growth

Growth, Age 60 & Under

Growth, Age 60+

Share of Total Population Growth, Age 60+

1980-2012

86 million

62 million

24 million

27%

2012-2040

80 million

39 million

41 million

51%

Breaking it down further:

Period

Population Growth,
Age 20-50

Population Growth,
Age 70+

1980-2012

31 million

12 million

2012-2040

20 million

33 million

This is tremendously simplified, but if you buy these forecasts, one takeaway might be this:

  • During the last three decades, the most growth was found in industries catering to young households -- consumer goods, construction, education, and entertainment.
  • During the next three decades, most of the growth might be in industries catering to older groups -- health care, retirement services, planning, and leisure.

For more on how demographics impact the economy, check out:

 

 

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