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Conclusions

The population age shifts projected for California underscore several important challenges:

• Doubling of the older population over the next twenty years means there is little time to prepare. Addressing the needs of California’s aging population is increasingly urgent.

• Unexpectedly slow growth in the young population makes the population age shift even more challenging. Disproportionately slower growth in the young population means that the share of old people will increase more sharply than previously anticipated and the steepness of this projected increase in share is both surprising and startling. The slower growth in young people and working-age people will result in fewer and fewer worker to support each old person through production, taxation, and caregiving. This slower growth stems both from lower birth rates and lower levels of immigration. The declining support ratio raises the urgency of preparing for an aging population. It also raises the urgency of addressing the role of immigration in maintaining our competitive advantage.

• The projection of continued, albeit slower, growth in the working-age population is positive news for economic growth, but the results will depend on whether the workforce is educated and trained to match the state’s economic needs. Continued workforce growth distinguishes both California and the United States from other advanced economies, many of which, including Germany and Japan, face shrinking workforces and shrinking total populations. If educated and employed wisely, California’s growing workforce can indeed be a competitive advantage that contributes to long-term economic growth.

*Note: The recently released 2012 Interim Population Projections from the California Department of Finance replace the State’s 2007 projections; detailed population projections by age, race, ethnicity, and county are expected in early 2013. The latest available US Census Bureau population projections were completed in 2008; updated projections are expected in late 2012.

References:

State of California, Department of Finance, Interim Population Projections for California and Its Counties 2010-2050, Sacramento, California, May 2012 http://www.dof.ca.gov/research/demographic/reports/projections/interim/view.php

U.S. Census Bureau, Population Division, Projections of the Population and Components of Change for the United States: 2010 to 2050 (NP2008-T1), Washington, DC, August 2008
http://www.census.gov/population/www/projections/2008projections.html

Adele Hayutin is Senior Research Scholar and Director of the Global Aging Program at the Stanford Center on Longevity.