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Indiana's Median Age is Pushing Forty:
Latest Population Projections for Indiana Counties and Regions

Indiana Business Research Center, Kelley School of Business, Indiana University

New population projections released by the Indiana Business Research Center (IBRC) at Indiana University’s Kelley School of Business portray big changes on the horizon in the size, geographic distribution, and age composition of Indiana’s population.

Labor Force

A potential labor shortage may hinder economic development efforts across much of Indiana over the next twenty years, according to new projections issued by the IBRC. Population in the prime working ages of twenty-five to fifty-four can be expected to shrink in seventy-three of Indiana’s ninety-two counties between 2000 and 2020. This twenty-five to fifty-four age range could be considered the most economically productive in the entire life span, since labor force participation is typically highest at these ages. A large share of the population under age twenty-five is still focusing on education, while at age fifty-five and older, the impacts of early retirement and disability result in lower labor force participation rates.

The most economically productive segment of the population in 2020—those age twenty-five to fifty-four—are between the ages of eight and thirty-seven today.

The relatively few counties that can be expected to gain population in the twenty-five to fifty-four age group are concentrated mainly in the center of the state, near Indianapolis, as seen in Figure 1. The ten-county Indianapolis Metropolitan Statistical Area (metro) is expected to gain approximately 86,000 people in the twenty-five to fifty-four age group in the twenty years after 2000, while the rest of the state will lose 140,000. Even within the metro, change in this age group will be geographically uneven, with strong growth in Hamilton, Hendricks, and Johnson counties overcoming a large loss in Marion County. In addition to Marion, six other counties are expected to lose more than 5,000 people in the prime working ages over the twenty-year period.

Figure 1
Numeric Change in Population Age 25 to 54, 2000 to 2020

Figure 1

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These findings raise doubts about the prospects for future economic development in the areas that are projected to lose population in the twenty-five to fifty-four age group. Losses in this age group would almost certainly reduce the labor force in the impacted areas, unless labor force participation rises substantially among the older population, or those under twenty-five. Keeping older workers active in the labor force could have multiple benefits for Indiana and the nation, but increased participation at younger ages would probably have a negative effect on educational attainment.

Although it may seem that migration alone accounts for the growth or decline in this coveted age group (with large numbers of people from outlying areas of the state presumably moving to the Indianapolis metropolitan area), this is not the case. While job opportunities in the Indianapolis metro may exercise a pull on people in the prime working ages, most counties across the state would inevitably experience a decline in this age group even if all county borders were closed and no migration were permitted. The large baby boom generation outnumbers subsequent generations in most counties, and this uneven age structure is responsible for much of the decline in the prime working ages through 2020. By the time the last boomer passes out of the twenty-five to fifty-four age span in 2020, losses in that age group will certainly be mitigated. In the most current set of national population projections, released in January 2000, the twenty-five to fifty-four age group is expected to decline by 2.4 percent between 2000 and 2020.

Elderly

Just as aging boomers will have a huge impact on the labor force, their entry into the traditional retirement age of sixty-five will also transform the state. Figure 2 depicts the changing population shares in two age groups at opposite ends of the age spectrum: under fifteen and sixty-five or older. By 2035, Indiana is expected to have more residents age sixty-five or older than those under fifteen. At the beginning of the projection period, about one in eight Hoosiers had reached their sixty-fifth birthday. This proportion is expected to remain stable through 2010, but it will climb steadily after that point, reaching 21 percent in 2040. The population share under fifteen, by contrast, remains relatively stable throughout the entire projection period.

Figure 2
Population Share, 2000 to 2040

Figure 2

The population growth among the elderly is perhaps even more impressive than the change in share. The number of people age sixty-five or older will virtually double from about 753,000 in 2000 to 1.5 million in 2040 (see Table 1). A marginal increase of 8,000 is expected statewide in the initial 2000 to 2005 projection interval, but the increase from 2010 to 2015 will jump to 108,000. Between 2020 and 2025, the state can expect to add another 162,000 senior citizens.

Table 1
Population Projections for Metropolitan Statistical Areas, 2000 to 2040

Table 1

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Median Age

Median age grew dramatically in most Hoosier counties between 1970 and 2000, and it will continue to increase, although at a slower pace. By 2040, Indiana’s median age is projected to be 39.4 years of age. In Figure 3, a distribution of the ninety-two Hoosier counties is presented across four ranges of median age for the census years from 1970 through 2000, along with projected data for each decade up to 2040. In 1970, only one county had a median age over thirty-five, and by 1980, there was not a single county in that range. Twenty years later, however, a total of seventy-seven counties had experienced population aging to such an extent that their median age was thirty-five or higher. Another twenty years later, it is expected that eighty-seven of ninety-two Indiana counties will have a median age of thirty-five or older. By 2030, median age will exceed forty years in sixty-two counties.

Figure 3
Distribution of Counties by Median Age
Historical 1970 to 2000 and Projected 2010 to 2040

Figure 3

At the other end of the distribution, median age in 1970 was under thirty years old in sixty-nine counties—that is three of every four. Results of Census 2000 left only three Hoosier counties—Lagrange, Monroe, and Tippecanoe—with such a young median age. By 2030, only Lagrange County is expected to have half of its population under age thirty.

Projections data are available for counties, regions, metros, and customized areas at www.stats.indiana.edu