In July of 2022, the Congressional Budget Office (CBO) released a report projecting demographic trends in the U.S. for the next 30 years. The Demographic Outlook: 2022 to 2052 provides population projections that underlie the CBO’s baseline budget projections and economic forecast published in May 2022, and long-term budget projections published in July 2022. Among other things, these projections help determine the expected impact on the social security system.
Two take-aways from the report are similar to the findings of other projections of U.S. population growth: the growth of the U.S. population is slowing, and immigration will be an increasingly important contributor to population growth.
The U.S. population is projected to grow by 0.3 percent per year, on average, over the coming 30 years. For comparison, population growth over the previous 40 years averaged 0.9 percent. Within the overall growth of the population, the cohort that is 65 or older will grow at a faster rate than younger cohorts. The number of people in their prime working years, age 25 to 54, will grow at an average annual rate of 0.2 percent. By contrast, that cohort grew by 1 percent on average during the period 1980 to 2021. In 2022, the number of people in their prime working years relative to those who are 65 and older (and generally retired or about to retire and drawing Social Security) is 2.3 to 1. By 2052, that ratio will be 1.7 to 1.
Over the projection period, fertility rates remain below the replacement rate, and so immigration will increasingly drive population growth. CBO projects immigration to gradually rise to 1.1 million by the third decade of the projection period. (This is still 400,000 below the average net immigration in the early 2000s, prior to the Great Recession.) Over the next decade, immigration will account for about 75 percent of population growth. By 2043, immigration is projected to account for all of U.S. population growth.
Where Assumptions Could Go Awry
The CBO Notes that fertility rates in the U.S. averaged 2.02 children per woman in 1987 – 2007 period. In 2007, the rate peaked at 2.12. During the Great Recession, the rate began to decline, falling to 1.64 children per woman by 2020. CBO assumes the rate will rise to 1.75 births per woman by 2030. It is not hard to imagine, however, that another period of economic instability could create conditions for another downturn in the fertility rate.
The CBO projects mortality rates to decrease, with life expectancy rising by approximately five years by 2052. However, from 2015 to 2017, life expectancy in the U.S. actually declined — driven by suicides and drug overdoses, and life expectancy declined again in 2020, driven by COVID-19. It is not hard to imagine periods of life expectancy declines over the next 30 years. For example, the lethality of future pandemics might be increased due to the substantial percentage of Americans who don’t trust measures to protect us from deadly viruses. Also, it is not hard to imagine that, in an increasingly polarized society, violence may alter mortality projections. By 2020, for example, gun violence became the leading cause of death among children ages 19 and under.
Immigration is another area where there could be significant deviations from what is projected. CBO notes that, while net immigration averaged 1.5 million between 2000 and 2006, it fell considerably during the Great Recession. It never recovered by the time policies of the previous administration slowed immigration, and policies enacted during the COVID-19 pandemic caused a steep drop in immigration flows. Policies of future administrations could significantly impact these CBO projections.
If any of these rates (fertility, mortality, immigration) were to deviate significantly from CBO projections, the effects on the future workforce could be significant. For example, of the more than one million deaths due to COVID, approximately 260,000 of them were below retirement age (and more likely than not in the workforce). Between 2017 and 2022, the sharp downturn in net immigration removed 3.2 million potential workers from the workforce, contributing to our current labor shortage.
This report reinforces other population projections which have emphasized the importance of immigration to U.S. population growth a — and to the growth of our workforce.