UT Studies Economics of State Population Changes

KNOXVILLE — The percentage of Tennesseans who contribute most to the state’s economy will dwindle over the next 20 years as the percentage of residents who rely more on state services grows, a University of Tennessee study says.

Dr. Paula Dowell of UT’s Center for Business and Economic Research analyzed economic impacts of state population demographic changes from 1990-2000.

Dowell found the percentage of Tennesseans aged 45-59 rose from 20 to 25 percent, the most of any age group. They also grew at a faster rate (50 percent, age 45-54; 33 percent, age 55-59) than other groups.

This age range is when people contribute most to the economy through employment, taxes and spending, yet place the least burden on state services such as health and education, she said.

“Most people within that age group are in their most economically productive years, working and purchasing goods and services,” Dowell said. “They also demand fewer public services. Most of their children are through high school so there is no demand on public education. They do not have the need for medical services found in older populations.

“They are contributing more to the economy than they are taking away.”

However, Dowell also found the percentage of Tennessee residents below 25 years old dropped 1.4 percent — the biggest decline of any age group. This age group also had the slowest growth rate of all: 5 percent for those 20-24 years, and 10.6 percent for those 25-44 years.

“If the trends continue, you’re going to have 45-59 year olds leaving the productive life and fewer people picking up these roles and filling the jobs,” Dowell said. “You will see an increase in the elderly dependency ratio.

“The ’90s were very good for Tennessee, but if the state does not become more successful in attracting people in the 20-44 years range and retain college graduates in these age groups, what was good for the ’90s could be troublesome in the future.”

Dowell said the shift in Tennessee’s population age demographics correspond with the national trend of the aging “Baby Boom” population.

Other 1990-2000 data in the UT study include:

— Tennessee’s population, the nation’s 16th largest, grew from 4.9 million to 5.7 million, the nation’s 12th largest numeric increase and 14th largest percentage increase.

— The state’s 16.7 percent population growth outpaced the U.S. rate of 13.2 percent.

— The slowest population growth was in Hancock County (0.7 percent); the fastest growth was in Williamson County (56.3 percent).

— Shelby is the most populous county with 897,472 people; Davidson is second with 569,891, followed by Knox with 382,032. Pickett is smallest with 4,945 residents.

— The Hispanic population was Tennessee’s fastest growing ethnic group, tripling to 2.2 percent of the population.

An online report on the study is available here.