Population, Income, and Expenditures

1
Population, Income, and Expenditures

• George Haynes
• Doug Young
• Myles Watts
• Department of Agricultural Economics and
  Economics
• Montana State University
• Support from the Montana Extension Service and
  the
• Montana Agricultural Experiment Stations, and the
  Montana Council for Economic Education
• February 2008

2
Montana Aging

• Montana 1930 2030
• Economic Implications

1-1
3
Age Distribution

1-2
Source U.S. Census Bureau
4
Age Distribution 1940-2000
1-3
Source U.S. Census Bureau
5
Age Distribution 2000-2030
1-4
Source U.S. Census Bureau
6
0 17 Year Olds
1-5
Source U.S. Census Bureau
7
Concern 65 and older
1-6
Source U.S. Census Bureau
8
Dependency Ratio

• What is it?
• Total Age Dependency Ratio
• non-working / working
• non-working
• 0 17 years of age (youth)
• 65 and older (elder)
• working
• 18 65 years of age

1-7
9
Dependency Ratios

• Young Age Dependency Ratio
• 0 17 years of age / working
• Old Age Dependency Ratio
• 65 and older / working

1-8
10
Montana Dependency Ratios
1-9
Source U.S. Census Bureau
11
Montana Dependency Ratios1930 2030
1-10
Source U.S. Census Bureau
12
County Population Estimates from U.S Census
Bureau and NPA
1-11
Source U.S. Census Bureau and NPA Data
Services, Inc. NPA Data Services, Inc.,
established in 1985, is an economic research,
forecasting, and data development firm located in
the Washington, DC area.
13
Comparing Census and NPA0 17 year olds
1-12
Source U.S. Census Bureau and NPA Data
Services, Inc.
14
Comparing Census and NPA18 64 year olds
1-13
Source U.S. Census Bureau and NPA Data
Services, Inc.
15
Comparing Census and NPA65 year olds
1-14
Source U.S. Census Bureau and NPA Data
Services, Inc.
16
Census and NPA Same Trend for YADR
1-15
Source U.S. Census Bureau and NPA Data
Services, Inc.
17
Census and NPASame Trend for OADR
1-16
Source U.S. Census Bureau and NPA Data
Services, Inc.
18
Census and NPA Differences

• Why different sources and methods
• Different birth and death rate calculations
• Census Bureau uses projected fertility and
  mortality rates based on birth and death
  statistics by state from the National Center for
  Health Statistics (NCHS)."
• NPA uses national age specific birthrates and
  age and sex specific survival rates adjusted for
  regional variations
• Different internal external migration
  calculations
• The U.S. Census Bureau uses state migration
  patterns derived from the Internal Revenue
  Service.
•   NPA projects internal U.S. net migration flows
  based on economic changes projected by
  themselves. 

1-17
Source Census and Economic Information Center,
Montana Department of Commerce
19
1-18
Source NPA Data Services, Inc.
20
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Source NPA Data Services, Inc.
21
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Source NPA Data Services, Inc.
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Source NPA Data Services, Inc.
23
Implications

• Social Contract
• Medicare / Social Security
• Fewer workers supporting more retirees
• Reduction in standard living of workers
• Medicaid taking care of medical expenses for
  elderly
• Most importantly, Assisted Living and Nursing
  Homes

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Montana Medicaid Expenditures

• Percentage of State and Federal Medicaid
  Expenditures
• 
  2005 2030
• Elderly 24.0
  41.9
• Amount 161.9 m.
  363.1 m.
• Total Medicaid Budget 674.7 m.
  866.1 m.
• State Share 28.0
  ?
• Federal Share 72.0
  ?

1-23
Source Montana Department of Health and Human
Services and U.S. Census Bureau population
estimates
25
Medicaid Projections
  Base Year - 2005 Base Year - 2005 Base Year - 2005 Base Year - 2005
Medicaid Medicaid Total Medicaid
Categories Expenditures Expenditures Population per capita
( million) () ()
Aged (65) 161.9 24.0 120,206 1347.1

Other 512.8 76.0 790,445 648.8

Total 674.7 100.0 910,651 740.9
Source U.S. Census Bureau and Montana
Department of Health and Human Services (The
Montana Medicaid Program, State Fiscal Years
2005/2006 Report for the 2007 Legislature)
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Medicaid Projections(2005 Dollars)
    Projected Year - 2030 Projected Year - 2030  
Medicaid Medicaid Total Medicaid
Categories Expenditures Expenditures Population per capita
( million) () ()
Aged (65) 363.1 41.9 269,558 1,347.1

Other 503.0 58.1 775,340 648.8

Total 866.1 100.0 1,044,898 740.9
Source U.S. Census Bureau and Montana
Department of Health and Human Services (The
Montana Medicaid Program, State Fiscal Years
2005/2006 Report for the 2007 Legislature)
1-25
27
Assisted Living/Nursing Homes

• Assisted Living Facilities Montana
• 3,597 beds in 2000 (120,949 people 65 )
• Approximately 3 percent of adults over 65 using
  Assisted Living Facilities (although, not all
  adults in Assisted Living Facilities are 65)
• Nursing Home Facilities Montana
• 7,374 beds in 2000
• Approximately 6 percent of adults over 65 using
  Nursing Home Facilities (although, not all adults
  in Nursing Home Facilities are 65)

1-26
Source Montana Department of Health and Human
Services (Nursing Home Bed Need Projections)
28
Assisted Living/Nursing Homes

• In 2030 . . .
• Assisted Living Facilities
• Need to more than double the number of beds
• Over 8,000
• Nursing Home Facilities
• Need to more than double the number of beds
• Over 16,000

1-27
Source Based on U.S. Census Bureau population
estimates
29
Older Working Population

• Wages and Benefits
• Willingness to work for less
• Productivity
• Health insurance
• Medicare coverage lowers costs to business
• Retirement /pensions

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30
Older Working Population

• Increase in Worker Compensation
• Older workers may be more likely to be injured on
  the job
• Return on capital
• Return on capital may be higher
• Workplace adjustments
• Less physically demanding jobs
• Retraining
• Supervision
• older workers supervised by younger workers

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Ameliorating Factors

• Increase in worker productivity
• Increase in technology
• Reduce services to the elderly
• Increase retirement age
• More part-time post retirement employment
• Declining school burden

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Montana Aging

• Summary
• Percentage of people 65 nearly doubles between
  now and 2030 (14 - 26)
• Dependency ratios are increasing
• Issues
• Medicaid (nursing home and assisted living care)
• Older workers in the workforce
• Ameliorating factors

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Questions

• ???

Source U.S. Census Bureau
34
Income Before Taxes

• Nationally Representative Sample
• Survey of Consumer Finances, 2004
• Board of Governors of Federal Reserve System
• Age is for the head of household
• All mean income figures are on a per capita basis

35
Total Income Before Taxes
2-1
Source Survey of Consumer Finances, 2004
36
Wage and SalariesIn total, what was your
(family's) annual income from wages and salaries
in 2003, before deductions for taxes and
anything else?
2-2
Source Survey of Consumer Finances, 2004
37
Professional PracticeIn total, what was your
(family's) net annual income from a professional
practice, business, limited partnership, or farm
in 2003, before deductions for taxes and anything
else?
2-3
Source Survey of Consumer Finances, 2004
38
Non-Taxable InvestmentsIn total, what was your
(family's) annual income from non-taxable
investments such as municipal bonds in 2003,
before deductions for taxes and anything else?
2-4
Source Survey of Consumer Finances, 2004
39
Other Interest IncomeIn total, what was your
(family's) annual income from other interest in
2003, before deductions for taxes and anything
else?
2-5
Source Survey of Consumer Finances, 2004
40
DividendsIn total, what was your (family's)
annual income from dividends in 2003, before
deductions for taxes and anything else? 
2-6
Source Survey of Consumer Finances, 2004
41
Sales of Stocks, Bonds, Real EstateIn total,
what was your (family's) annual income from net
gains or losses from mutual funds or from the
sale of stocks, bonds, or real estate in 2003,
before deductions for taxes and anything else?
2-7
Source Survey of Consumer Finances, 2004
42
Net Rents/Trusts/RoyaltiesIn total, what was
your (family's) annual income from net rent,
trusts, or royalties from any other investment or
business in 2003, before deductions for taxes and
anything else?
2-8
Source Survey of Consumer Finances, 2004
43
Unemployment/Workers CompIn total, what was your
(family's) annual income from unemployment or
worker's compensation in 2003, before deductions
for taxes and anything else?
2-9
Source Survey of Consumer Finances, 2004
44
Child Support/AlimonyIn total, what was your
(family's) annual income from child support or
alimony which you or your family here received in
2003, before deductions for taxes and anything
else?
2-10
Source Survey of Consumer Finances, 2004
45
Public AssistanceIn total, what was your
(family's) annual income from TANF, food stamps,
or other forms of welfare or assistance such as
SSI in 2003, before deductions for taxes and
anything else?
2-11
Source Survey of Consumer Finances, 2004
46
Social Security/Pensions(Including the
retirement income you told me about, in/In)
total, what was your (family's) net income from
Social Security or other pensions, annuities, or
other disability or retirement programs in 2003,
before deductions for taxes and anything else?
(Please do not include withdrawals from IRAS,
401(k)s and other such retirement accounts.)
2-12
Source Survey of Consumer Finances, 2004
47
Other Income(Other than the pension account or
IRA withdrawals you told me about earlier in the
interview, in/In) total,  what was your
(family's) annual income from any other sources
in 2003, before deductions for taxes and anything
else?
2-13
Source Survey of Consumer Finances, 2004
48
Consumer ExpendituresUS Bureau of Labor
Statistics

• US Averages
• Dollars per Person
• 2006

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