Mobility within the U.S. has been slowing for a few decades.
In 2021-22, the overall migration rate stood at 8.7% – just modestly higher than the 2020-21 rate of 8.4%, which was the lowest domestic migration rate in three-quarters of a century.
Even during these historic declines, the pandemic has resulted in considerable population shifts with most of the gains occurring in Southern states. Texas, North Carolina, Georgia and Arizona have been the biggest gainers.
North Carolina added more than 250,000 people between 2020 and 2022 with 81% percent of that increase due to migration. The gains at the state level were not evenly distributed with New Hanover/Brunswick/Pender counties accounting for 11% of it even though they only made up 4% of the state’s population in 2020. This population growth has resulted in significant economic stimulus as these new residents buy goods and services and contribute to all aspects of community life.
The two groups of people most responsible for these shifts have been remote workers and retirees. While most communities view the entry of remote workers as a boost to economic activity and talent, there is less enthusiasm and understanding of the role retirees play in local economies.
Brunswick County, for example, now has 33% of its population over the age of 65. That is more than a 12-percentage point increase in a short span of 10 years. Mentions of these statistics spark concerns about the “graying’’ of the population, a term often used to refer to the aging of an area’s population. While a growing share of the older population is potentially problematic from a labor market standpoint, there are significant advantages to drawing retirees to a community as they can be a significant social and economic engine.
How exactly do retirees contribute to the local economy?
Retirees benefit a community in a variety of ways. Perhaps most importantly from an economic standpoint, they tend to have income streams and savings that are not linked to the health of the local economy and can therefore serve as a buffer to local economic fluctuations. This is particularly important as their incomes tend to not only be stable but come from outside the region and therefore generate additional streams of incomes and jobs.
Additionally, retirees tend to typically be in much better financial health, and they tend to spend more money on goods and services such as housing, food, entertainment, health services and many others. These expenditures and assets create jobs and stimulate local businesses, which results in added tax revenues that support public expenditures and services. Furthermore, there is much literature that shows the significant impact of volunteerism by older individuals. As of 2022, the value of volunteering by seniors has been estimated to be $77 billion at the national level.
What does this mean for local economic development?
The reality is that no two communities have the same demographics, industrial structure or amenities. Some communities choose to focus their efforts on recruitment/retention of companies; others prefer to focus on quality of life and attracting entrepreneurs; and some cater to retirees.
Understanding the contributions retirees can make to a local economy is important given the significant shifts in population that have been occurring over the past few years.
The migration toward the south of the country is not showing any signs of slowdown, and it is important to understand both the opportunities and challenges that come from a growing population.
The concerns about the aging population, while warranted, miss the opportunity presented by older individuals who can serve as economic engines in their newfound homes.
Mouhcine Guettabi is a regional economist with UNCW’s Swain Center and an associate professor of economics at UNCW’s Cameron School of Business.