New Hampshire Municipal Association
New Hampshire Municipal Association

New Hampshire Town And City

Communities Can Influence Demographic Trends

New Hampshire Town and City, September/October, 2018

By Brian Gottlob

New Hampshire, like many states, is confronting demographic trends that, in the coming decades, will challenge the ability of the state to grow its population, labor force, and economy.  Whether the issue is that “New Hampshire’s population is rapidly aging,” or “all of the state’s young people are leaving,” or ”more people are leaving New Hampshire than are moving into the state,” there is widespread concern  among the public as well as state and local officials about how these trends will affect the economy of the state and its communities in the future.  While state policymakers consider how New Hampshire should best address important demographic trends, it is important to understand that statewide trends are only an aggregation of 234 local trends and more importantly, that demographic trends in many New Hampshire communities do not reflect the same troubling statewide trends.   Understanding that New Hampshire is not monolithic and demographic trends across communities vary widely is important for at least three reasons: first, it suggests that there are characteristics of some communities that contribute to their ability to buck troubling demographic trends; second, it suggests that local decisions and policies rather than state efforts are likely to be more effective in encouraging positive demographic trends; and finally, that communities of all sizes have an ability to influence the demographic trends that will, in large part,  determine how economically vibrant they are in the future. 

Domestic Migration is Increasingly Important

Between 2010 and 2017 six of New Hampshire’s 10 counties had more deaths than births in the county, meaning “natural population growth” has been negative in those counties this decade.  Three of those counties (Cheshire, Sullivan, and Coos) experienced negatives overall population growth during that time period, while Belknap, Carrol, and Grafton Counties managed population growth despite negative “natural population growth” because they were able to attract individuals and families from other states and/or regions of New Hampshire.  

The reality is that New Hampshire has (depending on the year) either the lowest or second lowest birth rates (defined as the number of births per 1000 women ages 15-44) of any state in the nation.  Not only does that lower the potential for natural population growth in the state, it is also the single most important factor contributing to the aging of New Hampshire’s population.  When you aren’t adding individuals at age zero (births) the median age of a community or state can increase rapidly unless, as was the case for decades in NH, you are able to overcome low birth rates by attracting individuals from other communities or states.   Beginning in the 1970’s New Hampshire saw large numbers of individuals (especially families) migrating to NH from other states.  In particular the state attracted married couple families in the 30-44 age group and with children.  In effect, NH “imported” a large percentage of our children. In the process the state’s median was kept from rising rapidly.  But in the 2000s in-migration to NH from other states slowed and went negative, largely related to the “great recession” but also to a nationwide trend of lower rates of movement between states.

Low Birth Rates Add to the Importance of Domestic Migration

New Hampshire’s birth rate is not going to increase much, if any, but it is a sign of our state’s success rather than our failure.  Women in New Hampshire, on average, have higher levels of educational attainment and participate in the workforce at higher levels than do women in almost all other states.  Those two factors are strongly correlated with lower birth rates.  As more of our population moves beyond child bearing years, the possibility of more counties and more communities experiencing negative natural population growth increases.  Unless negative natural population growth is offset by the movement of individuals and families into a community, regions, and the state, the result is a declining population, a smaller labor force, and ultimately a shrinking economy.

With so many communities in New Hampshire dealing with, or soon to be facing, negative natural population growth, the ability to attract individuals and families becomes a critical factor in determining the longer-term vibrancy and economic health of many, especially smaller, communities in the state.   The good news is that the ability to attract and retain individuals is a factor that is strongly influenced by the character, quality, amenities and services offered by communities, as well as the decisions and actions of local residents and officials.  That means communities, even smaller communities without dedicated economic or community development departments, can employ their planning, zoning, community services, budgeting, and local decision making to influence more positive long-term demographic and economic trends.    That isn’t just theory or wishful thinking, it is clear from the differing demographic trends across communities even among neighboring communities in New Hampshire.

Demographics is the New Economic Development

For decades efforts to strengthen local economies in New Hampshire have focused on attracting businesses.   But today, with population and labor force growth slowing across the country, increasingly it is the ability to attract and retain people, especially individuals with higher levels of educational attainment and skill levels, that determines which communities and regions are prospering.  State government will continue to focus efforts on attracting businesses, but it will be the decisions and actions of local communities that largely determine whether New Hampshire continues to be an attractive location for the skilled, well-educated individuals that determine where businesses locate.  Rather than subscribe to the “NH’s demographic doom” scenario offered by so many, the state and its communities should look at communities that are bucking troubling demographic trends for clues to confronting demographic challenges.

The distinction between communities with favorable and unfavorable demographic trends isn’t just about differences between northern and southern NH.  Demographic trends vary just as much among communities that are neighbors in the state.  Think all of NH is aging rapidly and unable to keep or attract younger individuals?  Look at what has been happening at some of NH’s largest cities, as well as several communities in the same (seacoast) region of the state. Figure 1 shows the percentage of a community’s population that is age 25-34 (a rough approximation for millennials that excludes differences due to the college-age population).   Several seacoast communities have a relatively high percentage of individuals ages 25-34, while several others, including adjacent communities, have a relatively low percentage.

Figure 1

In the aggregate it is true that the state’s population is aging more rapidly than we would like, but more accurate is to say that communities in NH are aging at very different rates.  That is clear from Figure 2 which shows how some larger communities in NH and some seacoast communities have been aging over three decades.  The chart shows three different colored bars. The first (blue) bars show each community’s median age in 1990. The second (gold) bars shows the increase in median age between 1990 and 2000.  The last (red) and most important bar shows how much the median age increased between 2000 and 2016.  The chart shows how dramatically different communities in the same region have aged since 2000.  Because many of the differences are among communities in the same region, this suggests that it is the characteristics of communities, their policies and local decision making that are influencing demographic trends.  Understanding these differences is a key to addressing demographic challenges in the state.

Figure 2

What are the differences?  First, most of the communities that attract younger and residents of all ages, have invested in, or enabled investment by others, in improving the quality of their community’s amenities. 

I would argue that any reader of this article could visit any community in the state and be able to discern whether or not it is likely to be attractive younger individuals, but if not, here is are some things to look for:

 

Looking at the list above suggests that communities have the power to take actions to address important demographic trends. Not simply to attract one demographic group but in the process becoming more attractive to all groups.  Few communities have the ability to attract even medium sized employers, but, in an era where people are the scarcest resource looking to attracting and retain individuals may be the best long-term strategy for maintaining vibrant communities.

Brian Gottlob is Principal of PolEcon Research, an economic research firm based in New Hampshire.  Brian can be reached by phone at 603.988.9779 or by email at brian@poleconresearch.com.  PolEcon specializes in identifying, understanding and communicating emerging economic, demographic, energy, fiscal, labor market, real estate, and public policy trends at the intersection of private sector activity and government policy, where public sector action or inaction can significantly impact the growth, development, and profitability of individual businesses, industries, not-for-profit organizations, and geographic regions.

 

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