America is aging, which raises the key issue of economic balance between younger working people and older nonworking people.  Generational balance is often measured by how many people over age 64 there are for every “working age” person – those aged 20 to 64. That measure is called the “elder ratio”.

Older adults are more likely than younger adults to need support from working age family members and public resources that are provided by the taxes of the working age population.

If the elder ratio is low, it means there are lots of working age people able to provide resources for older people. If the elder ratio is high, younger, working people will strain to support older people.

It is a good idea to project the elder ratio under different visions of the future, in order to figure out whether we are going to face problems with generational balance, and if so, where and under what circumstances they are likely to crop up.

By definition, projections of the elder ratio depend a lot on the assumptions you make about death rates.  This is because, since death rates are so high at older ages, a change in the assumption about death rates has more impact on the size of that population than for other age groups.

Projecting future populations

The new Mapping America’s Futures tool illustrates these differences.  When you look at a scenario for the future with average birth rates, migration, and death rates, the growth in the size of the population 65 and over is 82.2 percent (82.2 percent!) with little geographic variation.  Part of this explosive growth is the imminent retirement of the baby boomers, and part comes from assuming that death rates will continue to decline in the future. When you change the assumption about death rates and assume that they are going to be on the high side there is more geographic variation; in particular the Eastern Mountain region and the Great Plains regions have less growth in the elder population.

Changing assumptions about death rate shows very different outcomes

How much impact higher death rates could have on the elder ratio and population change more generally varies greatly by how large a share of the population elders make up now in a particular place.  Compare, for example, Indianapolis, where people over 65 made up 10.8 percent of the population in 2010.  With average death rates the elder ratio in Indianapolis is projected to be 0.28. (or about three working age people for every retired person)and population growth between 2010 and 2030 is projected to be 38.2 percent.  Under an assumption of high death rates, the elder ratio falls to 0.24and growth falls to 32.0 percent - that is, not much change.

By contrast, in Charleston, West Virginia, where elders made up 15.8 percent of the population in 2010, the projected elder ratio goes from 0.26 in 2010 to a projected 0.53 in 2030 under the assumption of average death rates; the projected elder ration in 2030 under an assumption of high death rates is 0.44.  Moreover, in a future with average death rates, the population of Charleston will shrink by approximately 7.1 percent.  The only segment of the population that is projected to grow in this vision of the future is the over 65 group. When we imagine a future with higher death rates, where the over 65 population grows more slowly, Charleston is projected to shrink by 13.3 percent.

Some may ask “How likely is it that death rates will go up?”  After all, haven’t we been on a centuries’ long pathway to increasing life expectancy and declining death rates?  A new Urban brief suggests that death rates in some working age populations are increasing, which could mean that the health of the population reaching their elder years over the next fifteen years may be poorer than it was in past generations.  If so, localities where elders are a large percentage of the population need to consider many possibilities as they plan for the future.