Demographics, Immigration and Future Economic Growth of the United States


 

Americans

 

SUMMARY

 

The longer-run projection is a population of about 335 million people in 2100 (Lancet), about the same number as today. But there is a very wide range of uncertainty around this projection, partly depending on future birth rates and levels of immigration.

 

The U.S. birth rate is around 1.6, below the replacement level of 2.1. This is inline with most industrialized countries but higher than Japan and China. 


Because of demographics, the United States could have a better economic future than almost any other industrial or industrializing country. Almost all these countries will experience declining populations (if levels of immigration do not substantially increase), many with population decreases of 30-50%. Also, most of these countries will have higher dependency ratios (a higher percent of old people) than the U.S. That is, the U.S. will have a relatively younger population. This is partly due to higher birth rates and high rates of immigration into the U.S. since the 1960s.

 

DEMOGRAPHICS OF AMERICA:  POPULATION PROJECTIONS

 

For generations, demographers considered America exceptional. High levels of immigration and relatively high fertility rates increased its population faster, and kept it more youthful, then its rich country peers in Europe. Americans within their borders were also exceptionally mobile.

 

America has had high population growth rates since the first immigrants. (For a detailed look at immigration in colonial times, see American Colonial History, 1607-1775) Since becoming a country, America’s population has gone from 4 million in 1790 (the first census) to 30 million in 1860 to the current (7/24) population of 343 million. The main reasons for America’s high population growth rates in the past have been high birth rates, immigration, relatively healthy and well-fed population, and industrialization (economic development and growth).

 

The period from 1950 to 2000 was unusual. 

 

Population during this period was:

 

 

Year

Population

Millions

Decade

Increase

Millions

Decade

% Increase

 

1950

152

 

 

 

1960

176

24

16%

 

1970

200

24

12

 

1980

223

23

12

 

1990

248

25

11

 

2000

282

34

14

 

2010

311

29

10

 

2020

339

28

  9

 

 

United Nations, Department of Economic and Social Affairs, Population Division,

World Population Prospects, The 2024 Revisions

 

Between 1950 and 2000, the U.S. population almost doubled. The American “baby boom” started after World War II, temporarily reversing the long-term decline in birth rates. In the middle of this period, partly due to more effective and more available birth control, birth rates began a rapid decline. That was partly offset by an increase in immigration.

 

Since 2000, population growth rates have slowed. The 2020-2030 population growth rates will probably be lower, maybe around 6% for the decade, because of Covid, lower birth rates, and lower net migration rates (fewer immigrants and more past migrants leaving the United States).

 

The U.S. population at the beginning of 2024 was 343 million.

 

The UN projection continues:

 

2040 – 370 million

2050 – 381 million

2070s - 400 million

2100 -  421 million


The projected population in 2050 is only 11 million higher than 2040, a decade increase of only 3%. It is also 38 million people higher than 2024, an average increase of about 4-5% per decade.

After the 2070, the U.S. population will increase by less than one million per year. (United Nations, World Population Prospects, 2024 Revision.)

 

 

The alternative projection from Lancet expects the U.S. population to peak at 365 million in 2062 and then decline to 335 million in 2100, about the same number as today. All these projections include a forecast of immigration trends.  (Lancet).

 

There is a very wide range of uncertainty around this projection, partly depending on future birth rates and levels of immigration.

 

The U.S. birth rate has been around or slightly below replacement since 1975. The current (2024) U.S. birth rate at 1.62 is the lowest since records began in 1909. The population growth rate is 0.5% a year is low and falling. Even if the birth rate returns to the pre-Covid rate of 1.85, it is still below replacement.

 

Without past immigration and the children of immigrants, the U.S. population and labor force growth rate would have been lower in the past 40 years. And more of the total growth would have been in the over-65 age group.

 

The over-65 population is expected to double in the next 35 years, from 46 million now to over 98 million in 2060. (Population Reference Bureau) All of the total population increase will be in the over-65 group; the number of people under 65 will stabilize or decline. This will increase the ratio of the over-65 age group to the labor force age group of 18-64. Again, depending on immigration, since immigrants tend to be younger than the native population.

 

Like other industrialized countries, older adults are expected to outnumber children (under 18) in less than two decades. (Population Reference Bureau) 

 

The current birth rate is now about the same as that of most industrial countries. This might be partly due to the effects of Covid, although the current birth rate is the same as the birth rate during the Covid years of 2020-2022. But because of immigration and its demographic effects, the long run decline in America’s population and the labor force should be less than most other industrialized countries.

 

The partial abortion ban will have little effect on future population growth. Abortion pills accounted for over half of abortions before the ban. In Europe, pills account for about 70% of abortions.

 

The United States has a special problem. Because of the opioid/fentanyl epidemic and suicide, America’s adult mortality rate is increasing, mostly among white men under 55. A 15-year-old white male’s probability of dying before the age of 50 is now higher in America than in Bangladesh.

 

 

 

ECONOMIC GROWTH AND THE FUTURE SIZE OF THE LABOR FORCE

 

With birth rates below replacement, the future size of the labor force will depend critically on immigration. Future productivity increases will partly depend on immigrants’ young age composition, birth rate, and education and training.

 

The current (2024) unemployment rate is near a post-World War II low. The labor crunch is likely to persist for some time. The Pew Research Center projects no or very little growth in the working-age population over the next two decades. If the United States were to cut off the flow of new immigrants, Pew noted, the American working-age population would shrink.

 

The U.S. economy is growing at about 2-2½ percent a year. Employment is growing at about 1.0-1.5% a year; productivity is growing at about one percent a year. The size of the labor force (employed plus unemployed) is growing at about 0.3% per year; the growth rate is in long-term decline. This indicates that the growth in employment will probably be lower in the future than in the past. 

 

Most of the recent increase in the size of the labor force has been in the over-55 age group because this is the fastest growing age group and more Americans are working past retirement age. There has been little increase in total employment in the under-55 age group. There are studies that suggest an aging labor force causes slower productivity growth.

 

Like other wealthy countries, economic growth will depend on productivity increases. Productivity growth in the ten years of this economic expansion (since 2009, before Covid) was the lowest for any ten-year period since the end of World War II. It is possible, however, that government statistics are not picking up the productivity increases from innovations in information technology.

 

DEMOGRAPHICS AND IMMIGRATION

 

First, immigration. According to a 2015 Pew Research Center report, “Immigrants and their children will represent 36 percent of the U.S. population in 2065, which equals or surpasses the peak levels last seen around the turn of the 20th century. That share will represent a doubling since 1965 (18 percent) and a notable rise from today’s 26 percent.”

 

The report states that “the arrival of new immigrants and the births of their children and grandchildren accounted for 55 percent of the U.S. population increase since 1964...The projections also show that 88 percent of the increase in population until 2065 is linked to future immigrants and their descendants.”

 

Over the last two decades, immigrants and their children accounted for more than half the growth of the population of 25- to 64-year-olds, according to the Pew analysis. Over the next 20 years, immigrants and their children will have to make up for the net deficit in the labor force left by the retirement of the baby boom generation. If immigration were to continue at recent levels, around 2050 the United States would have the lowest percent of retirement-age population of any developed country. Even lower than China. This means more tax-paying workers per retired person than any other industrialized country.

 

Immigration over the last 50 years has impacted American demographics. The American population continues to grow despite below replacement birthrates of native-born inhabitants. Immigrants tend to be young, increasing the size of the workforce and slowing the increase of the average age of the population. The education and skills they bring is a “free lunch” for the American economy. A high percent of Americans who have won Nobel prizes were immigrants or the children of immigrants.

 

Immigrants and their children have traditionally provided a disproportionate share of entrepreneurs. “Immigrants start companies at twice the rate of native Americans. Almost half the companies in the Fortune 500 were started by immigrants or their children.” (Austan Goolsbee, “Sharp Cuts in Immigration Threaten U.S. Economy,” New York Times Sunday Business, October 13, 2019, 4). One of the founders of Google was from Russia. The current CEOs of Microsoft and Google are from India and the CEOs of Nvidia and AMD are from Taiwan. 

 

IMMIGRATION POLICY AND STATISTICS

 

Currently, there are 9 million people in the United States with green cards, which means they are on a path to citizenship. During the Biden administration, about 3.5 million people became naturalized citizens, almost one million a year. (New York Times, “Immigrants are Becoming U.S. Citizens at Fastest Clip in Years,” August 12, 2024, https://www.nytimes.com/2024/08/12/us/immigration-us-citizenship-rates.html?campaign_id=2&emc=edit_th_20240813&instance_id=131565&nl=today%27sheadlines&regi_id=63890344&segment_id=174998&te=1&user_id=5089c9bd79c36c52208f0e620625adfa. From the photos in the article, it appears a high percent are young people. 

 

America has an estimated 11 million illegal immigrants. But this is more complicated than the political rhetoric and sensationalist journalism indicates. Many will eventually attain some type of legal status leading to permanent residence.

 

The United States does not have a coherent immigration policy. The last immigration law was passed in 1990. Attempts to modernize immigration policy has been stymied because of difference between Democrats and Republicans.

 

The Trump administration reduced legal immigration and made it difficult for foreign, especially Chinese, students to attend American colleges. In the past, foreign students who remained in the United States were a major source of scientists, technology workers and entrepreneurs. Over half of the science, math and engineering graduate students in the U.S. are from foreign countries.

 

Discouraging immigration, limiting foreign work visas and foreign graduate students will reduce major sources of American innovation, technology entrepreneurs and productivity growth in the future.

 

DEMOGRAPHICS AND ECONOMIC GROWTH

 

Immigration over the last 50 years has impacted American demographics. The American population continues to grow despite below replacement birthrates of native-born inhabitants. Immigrants tend to be young, increasing the size of the workforce. The education and skills they bring is a “free lunch” for the American economy.

 


 

POLITICAL CONSEQUENCES OF DEMOGRAPHIC TRENDS

 

Immigration since 1960 has changed the ethnic and racial composition of America. Latinos make up about 20% of American population; Asians about 10%. There are about twice as many Latinos than blacks; there are almost as many Asians as blacks. This will change the influence of minority groups. (New York Times, 2/22/21)

 

The continuing change in the age distribution of the population will have political and economic consequences. For example, when the Social Security trust fund runs out in 2035 or before, benefits will drop by about 20%. With seniors on Social Security making up a large minority of voters, the government will probably make up the shortfall out of general tax revenue. This could increase federal yearly deficits or there would be fewer funds for other programs.

 

Fewer taxpayers in the future will have to support the greatly increased public health care costs of an aging population that is living longer.

 

It could be that the United States will have a better economic future than almost any other country because of demographics. But there probably will be internal political conflict over the distribution of income by age group.

SUMMARY

 

With labor force growth rates falling and productivity not increasing, the labor force aging, and legal immigration restricted, long-term U.S. economic growth rates may be lower in the future – below 2% - than in the 1950-2020 period. Increases in per capita income will depend on productivity increases from new technology, including the widespread application of robotics, new business software, artificial intelligence, and technology developed in the future.

 

 

SOURCES:

S.E. Vollcet et. al., “Fertility, mortality, migration, and population scenarios for 195 countries and territories from 2017 to 2100: a forecasting analysis for the Global Burden of Disease Study,” Lancet, July 14, 2020, 1285-1306. https://doi.org/10.1016/ S0140-6736(20)30677-2

 

Probably the best estimates of long-run population projections. Also includes “uncertainty internals” (two standard deviations from mean estimate)

 

United Nations, Department of Economic and Social Affairs, Population Division,

World Population Prospects, The 2024 Revisions

 

The United Nations population projections used here are the most recent “medium,” most likely projections. They are lower than the UN projections made two years earlier. It is likely that future UN projections will revise population numbers downward.  


Pew Research Center

 

Particularly strong on immigration data and analysis

 

United States Census Bureau (census.gov)

Statistica

Population Reference Bureau

Worldometer (for current figures)

Numerous articles in The Economist


For population projections and analysis for Japan, see


Demographics and Population Projections of Japan


In contrast to the United States, Japan is further along the declining population and labor force curve than almost any other country and may be a preview of the future of many countries outside of Africa. Oldest population. Limited immigration.


For an analysis of global demographics and long-run population projections, see


Global Demographics and Population Projections

  

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