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2015 Longevity Economy: Select MSA Reports

longevity

©OXFORDECONOMICS

In 2015, AARP commissioned Oxford Economics to produce economic contribution analysis of the Longevity Economy in 10 Metropolitan Statistical Areas (MSAs): Jacksonville, FL; Knoxville, TN; Lincoln, NE; Memphis, TN; Miami-Fort Lauderdale-West Palm Beach, FL; Nashville, TN; Omaha-Council Bluffs, NE-IA; Sioux Falls, SD; Tampa-St. Petersburg-Clearwater, FL; Tri-cities, NE (Hastings, Kearney, Grand Island). 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 29 percent and 39 percent of the population in each of the MSAs and the total economic contribution of the respective longevity economies account for at least $3 billion of Lincoln Nebraska’s GDP on up to $54.8 billion of Miami-Fort Lauderdale-West Palm Beach Florida’s GDP. The total economic contribution to the local GDP supports jobs, employee compensation and state taxes.

  • Among the MSAs analyzed, consumer spending by the over 50 households ranged from $2.8 billion up to $87.3 billion with Miami-Fort Lauderdale-West Palm Beach Florida older households being the biggest spenders.  Among a variety of spending categories including utilities, education, trade margins, restaurants and hotels, and cars, the topmost share of consumer spending in all MSAs goes to health care. 

  • Sixty to seventy-eight percent of those 50 and older are employed in each of the MSAs analyzed and they represent between 30 and 38 percent of the workforce with Hastings-Kearney-Grand Island, Nebraska having the highest proportion of workers and share of workforce. 

  • The Longevity Economy of each of these MSAs supports between $.3 billion and $10.4 billion in state and local taxes with Miami-Fort Lauderdale-West Palm Beach, Florida yielding the highest tax contribution. 

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 and indirect and induced contributions of spending by Americans ages 50 and older – also known as the Longevity Economy – in Metropolitan Statistical Areas (MSA) selected by AARP.  Results from the core model are for 2014 are reported in 2014 dollars.  In addition to the core model, data from the 2013 American Community Survey were used for the geographic distribution of the 50-plus population and their labor force participation and occupational distribution.  Population by age band in 2014 and forecasted out to 2040 are from the U.S. Census Bureau, and from Proximity One (see http://proximityone.com). 

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 MSA, which was estimated using U.S. Census Bureau MSA-level population figures by age. Total spend by product category is then scaled to MSA-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 MSA-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.