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Copyright 1998 by the Wyoming Department of Employment, Research & Planning

Population Projections and Labor Force Participation 1997-2006: Something Has to Give

by: Tom Gallagher

According to recently released population projections, nearly one quarter of Wyoming's total population, the boom generation, will mature into the near retirement age bracket of 45-59 years of age between 1997 and 2006. At the same time, a large share of that generation's progeny, the boom's echo, will come of an age characterized by increasing labor market participation and a high probability of migration. On average, 9,203 people will turn 20 years of age each year over the projection period, as 17.1 percent of Wyoming's population aged 10-19 moves in to the 20-29 age bracket. Will there be enough jobs for the new pool of labor market participants? If there are not, who will replace the large number of boom generation workers who begin to retire later (after the year 2006) and fill the 15-20 year gap between the boom and the echo generation?

Labor force participation (the proportion of the population in the labor force either working or seeking work) is relatively modest among the young, peaks during middle age and tapers off as we reach traditional retirement age. Among those aged 16-19, according to the Current Population Survey (CPS), 62.6 percent of Wyoming's youth were in the labor market in 1995. From there, participation rises steeply to 87.9 percent for those 35-44 years of age, but then declines to 65.9 percent for those aged 55-64. Unemployment rates tend to be high for youth (14.9% for ages 16-19 and 6.6% for ages 20-24) but taper off with age to less than three quarters of the statewide average for ages 45-54 years (3.1%) and falls to less than half the state average for those aged 55-64 (2.1%).

High participation rates and low unemployment rates are also complemented by relatively high earnings levels for middle-aged individuals. In 1996, for those individuals covered by Unemployment Insurance (see "The Wyoming Wage Record Classification System) nearly half of all males aged 35-44, and 55.8 percent of males and 21.8 percent of females aged 45-54, had earnings in the top 20 percent ($27,212 or more) when compared to all Wyoming workers. This suggests that so long as the existing jobs remain stable and available for these incumbents, there will be little reason for the boom generation to abandon them over the projections period and make them available to the growing number of young adults.

Using age-adjusted participation and unemployment rates to estimate the number of jobs needed in Wyoming for the 9,203 persons reaching age 20 each year, the state will need to create employment opportunities at the rate of 6,945 per year over the projections horizon of 2006. Some of those opportunities will come from separation from the labor force by people reaching the traditional retirement age of 65. Using the age adjusted participation and unemployment rates to estimate the number of vacancies created by people reaching the traditional retirement age over the projections horizon, these vacancies should create opportunities for 42.3 percent of Wyoming's youth who are coming of age in the labor market. This still leaves a gap of 3,981 jobs, annually. From 1996 to 1997, the annual average number of persons working in Wyoming declined by 5,478 persons. (See "The Local Area Unemployment Statistics (LAUS) Benchmark: What Does it Tell Us?") It is not particularly clear that Wyoming in the near term can recover from the job deficit of 1997, let alone add sufficient job opportunities for the children of the boom generation.

According to estimates from the Bureau of the Census(1), individuals aged 20-24 and 25-29 are the most likely to change residences (technically, this means to move to a different county) than are any other age groups. Given this historic propensity to migrate, it appears that the projections period in question, because of the large number of youth involved (an estimated 82,824 persons were 10-19 years of age in 1997), could be one in which a larger share (17.1%) of Wyoming's total population is lost due to out-migration than occurred through mid-decade. While creating job opportunities during the first half of the decade was problematic, the period was marked by at least some growth. Since that time, however, the number of persons employed first flattened and then declined. If Wyoming is unable to retain a substantial share of the children of the boom generation over the population projection period, then it seems quite likely that the job openings created by the retirement of the boom generation after 2006 will become even more difficult to fill. Given the demographics of labor supply at work, and the economics of labor demand about which we are currently aware, it appears that something has to give, and in a fairly dramatic way.

1 Hansen, Kristin A., Geographical Mobility: March 1993 to March 1994, U.S. Bureau of the Census, Current Population Reports, P20-485, U.S. Government Printing Office, Washington, DC, 1995.

Tom Gallagher is the Manager of Research & Planning.

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