AARP commissioned Oxford Economics to produce state level economic contribution analysis of the Longevity Economy in US. The "Longevity Economy" is the collective economic contributions by those people ages 50 and older – the sum of all economic activity driven by the needs of Americans aged 50 and older including purchased products, services, taxes, and labor force participation. Too often, this cohort is perceived as an economic burden and lackluster-consumer. The longevity economy is disrupting these myths and perceptions with national, state, and local economic data that show quite the opposite. Gross Domestic Product (GDP) is the best way to measure a country, state, local economy. GDP is the total value of everything produced by all the people and companies in the country, state, or locality.
(All reports in PDF format)
Key highlights of these reports include:
- The 50-plus cohort represents between 25 percent and 42 percent of the population in each of the states and the total economic contribution of the respective longevity economies account for at least 30 percent of the GDP in the District of Columbia on up to 54 percent of Florida’s GDP. The total economic contribution to the local GDP supports jobs, employee compensation and state taxes.
- The impact of the Longevity Economy is driven by at least $11.4 billion in consumer spending by 50-plus households in Wyoming on up to $704.4 billion generated by this cohort in New York. Among a variety of spending categories including utilities, education, trade margins, restaurants and hotels, and cars, the topmost share of consumer spending in all states is in health care.
- Americans ages 50 and older represent between a quarter (23 percent in District of Columbia) and 40 percent (in Vermont) of the workforce in the states. But, their total economic contribution to the state longevity economy supports between 30 (District of Columbia) and 60 percent (Florida) of all jobs in the states.
- The Longevity Economy of each state (except Alaska) supports over a quarter (29%) of state and local taxes in North Dakota to over half (58%) in Nevada.
The core impact results are from an economic impact model built by Oxford Economics using IMPLAN economic software (see http://www.implan.com) to calculate direct, indirect, and induced impacts of spending by Americans ages 50 and older – also known as the Longevity Economy – in each U.S. state. Results from the core model are for 2015 and are reported in 2015 dollars. In addition to the core model, data from the 2015 American Community Survey were used for geographic distribution of the 50-plus population and their labor force participation and occupational distribution. Population by age band in 2015 and forecasted out to 2040 are from the U.S. Census Bureau, and from the Weldon Cooper Center for Public Service at the University of Virginia.
Relative spending by product category by households headed by those of different ages is derived from the Bureau of Labor Statistics’ Consumer Expenditure Survey, and from data from the Centers for Medicare and Medicaid Studies. These relative spending levels of different households are then combined with estimates of the number of such households in each state, which was estimated using U.S. Census Bureau state-level figures on number of households by age of head of household. Total spend by product category is then scaled to state-level category household spending totals from IMPLAN, with the resulting spending of those over age 50 serving as the primary input to the IMPLAN models. GDP, jobs, labor income, and state & local tax impacts were calculated using IMPLAN and benchmarked against state-level totals from IMPLAN. For more detail on the methodology, please contact Jennifer Sauer at JSauer@aarp.org or (202) 434-6207 or go to Oxford Economics http://www.oxfordeconomics.com.