This is the third of a three-part series about Idaho’s rural economy. This part projects how rural Idaho’s population by age group and labor force participation will look in 10 years based on the previous 10-year trends.

Part one examines elements impacting Idaho’s rural economy today, including population, educational attainment, industries, occupations and wages.

Part two evaluates which dynamics influence rural Idaho’s dwindling labor force.

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The population divide between urban and rural Idaho is expected to widen over the next decade, following a national trend that favors urban areas. This will create continued challenges to the economic success of Idaho’s rural areas by limiting the human capital available to employers.

The state’s population is expected to increase by over a quarter of a million people to 1.9 million by 2025.

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

Of those 254,000 people, 84 percent, or 214,000, will be in the state’s seven urban counties — Ada, Bannock, Bonneville, Canyon, Kootenai, Nez Perce and Twin Falls. The remaining 37 counties – Idaho’s rural counties – combined will grow by 40,000 people. The share of the state’s population residing in urban counties is expected to increase from 67.1 percent to 69.4 percent, following an established trend that has been occurring for at least a decade.

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

Population growth in Idaho’s urban counties surpassed the rural rate across all age cohorts.  Based on the Idaho Department of Labor’s population projections, this trend is expected to continue.

The growth rate imbalances between urban and rural areas – a trend that has been in place for the past decade – is expected to continue. Only the expected growth in 65 years and older age group in rural counties is close to urban counties with a 1.5 percentage point lag.  The expected lag in rural-area growth for the other age groups is greater. The next-closest gap between urban and rural counties is the 25-39 year-old group, where the rural population will grow half as fast as the urban population. Additionally, the population of the youngest cohort, 0 to 14 years old, is expected to grow just 1.7 percent in rural counties, compared with over 20 percent in the urban counties. This imbalance in growth rates is likely due to people in rural communities aging in place and into the 65 and over cohort.

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

From 2005 to 2015, the population of those 65 years old and older in both urban and rural counties grew faster than the other age groups. In the urban counties, the over 65 group grew by 55 percent, nearly three times faster than the next fastest group – those between 25 and 39 years old – and over six times faster than that the slowest-growing group – those aged 15 to 24 years old. In rural counties, the 65 and older group grew three times faster than the 25 to 39 year-olds, by far the next fastest-growing rural cohort. This trend is not unique to Idaho – there was a 22 percent increase in the number of people over 65 years old nationally. However, Idaho is significantly outpacing the national average, especially in its seven urban counties.

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

While the oldest cohort is expected to see strong growth over the next 10 years in both the urban and rural areas, the rate is not expected to be greater than the rate of the previous 10 years. In fact, the growth rate for the oldest age group in the urban counties is expected to shed nearly 30 percentage points from 55 percent over the previous decade to 26 percent in the next decade. For rural Idaho counties, that decrease is expected to be nearly 15 percentage points, from 39 percent in the past 10 years to 15 percent over the next 10.

All of this has serious repercussions for the economic success of rural areas in the form of reduced labor force participation rates, and limited availability of human capital for rural communities. As individuals age above their mid-fifties, their likelihood of participating in the labor force falls. From ages 25 to 54, the labor force participation rate, or the rate at which people are working or looking for a job, hovers at or above 80 percent – or about four in every five people. After age 55, this rate falls precipitously. Only one in three people between age 65 and 69 are in the labor force, and less than one in 10 participate over age 80.

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

However, the participation rate for people over 65 years old has been increasing and is expected to continue increasing for at least the next decade. Unless rural areas can attract younger workers and their families, this trend of increasing participation rates must continue for employers in rural areas to find an adequate number of workers.

Source: Communications and Research Division, Idaho Department of Labor, 2016; Bureau of Labor Statistics, 2016

Notes:
These cohorts were chosen to represent functional economic periods for typical individuals as well as conform to five-year time periods, which is the level at which population was estimated. From birth until 14 years old, individuals typically live at home, do not work and rely upon parents or guardians to ensure their economic well-being. Between ages 15 and 24, individuals will enter the labor force, attend high school, receive post-secondary education and training or do some combination of these things. Between ages 25 and 39, careers are typically becoming established and in some cases, roots are being put down in specific locations. Ages 40 to 64 typically encompasses the mid-to-late career phase. Finally, while many Americans continue to work into their 60s and early 70s –one in three people between ages 65 and 69 are either employed or looking for a job – the average retirement age is between 62 and 65.

Ethan.Mansfield@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 332-3570 ext. 3455