Oregon Population Forecasts

by Anna Johnson

August 29, 2017

In July 2013, legislation went into effect in Oregon that assigned coordinated population forecasting to the Population Research Center (PRC) at Portland State University. This legislation recognized the need to prepare population forecasts for communities across the state with a consistent forecast methodology on a more regular basis. As of July 2017, the population forecasts for all counties in Oregon were finalized and publicly available online, with the exception of Multnomah County for which only the proposed forecast is available. This article looks at the predicted changes in population across the state and discusses the potential effects of a changing age structure on Oregon’s labor force and economy.

Forecasted Population Change in Oregon

Oregon’s population is projected to grow from today’s level of just over 4 million to about 6.2 million in 2065. The PRC generates their population forecasts by county, but for the purposes of this article, the forecasts are presented by the Oregon Employment Department’s nine workforce areas. The population forecasts by workforce area are calculated by summing the estimates of each county located in a particular workforce area. The forecasts are broken into three age groups: those younger than 25, those 25 to 64, and 65 years and older.
In absolute terms, the “prime working age” (those 25 to 64 years old) group has the largest population and will continue this trend into the future. The more interesting trend comes when looking at the “senior” age group (those 65 and older) and the “youth” age group (those younger than 25). Although the youth population is forecasted to remain larger than the senior population, by 2065 the total number of Oregonians 65 years old and older is expected to almost equal the total number younger than 25 years old.

From these forecasts, the percent change from the 2020 estimate to the 2040 estimate is calculated to allow for better comparisons among workforce areas. The workforce areas vary greatly in population size, with areas like Eastern Oregon and Southwestern Oregon being much smaller in population size than the Portland-Metro area. The percent change over time can be calculated all the way out to the year 2065, but because the forecasts become less certain the farther into the future one looks, we will only look at expected growth from 2020 to 2040.

The first thing that immediately stands out is that the senior population in all workforce areas is forecasted to grow at a much faster rate from 2020 to 2040 than either of the other two age groups. Eastern Oregon is expected to have the slowest senior population growth at 23.2 percent, while the Portland-Metro area senior population is expected to grow the fastest at 58.4 percent from 2020 to 2040.
In most of the workforce areas, the youth population is expected to grow the slowest of the three age categories. The slowest expected youth population growth rate is shown in the Rogue Valley area (1.3%), while the fastest youth population growth is expected in Clackamas (24.5%). Clackamas and Eastern Oregon are the only workforce areas where the younger than 25 age category is expected to grow faster than the prime working age group.

The prime working age population in most of the workforce areas is expected to grow faster than the youth population, but not as quickly as the senior population. The fastest population growth in this age category is expected in the East Cascades area (22.1%), while the slowest prime working age population growth is forecasted in Eastern Oregon (3.8%).

Potential Effects of Population Changes on Oregon’s Labor Market

As the Bureau of Labor Statistics (BLS) states, the growth of the labor force (and therefore the labor force participation rate) is directly related to the growth of the population. These changes in the labor force can then in turn have a significant impact on the growth of the economy and its ability to create goods and services. While it is difficult to predict exactly what will happen to labor force participation based on the predicted population change, there are a few likely changes as outlined by the BLS, the Congressional Budget Office (CBO), and the Urban Institute.

The Congressional Budget Office has projected that from 2017 to 2047, the labor force participation rate (the share of Americans 16 years and older who have a job or are actively looking for work) will decline from 62.8 percent to 59.2 percent. The aging of the population and the continued retirement of the baby-boomer generation are the most important factors driving down the overall participation rate. They also project that the participation rate flattens out over this 30-year forecast after an initial decline.

There are three expected trends that can put downward pressure on the labor force participation rate and three forces that will most likely offset the downward trends. First,  downward pressure will come from the members of subsequent generations, who tend to participate in the labor force at lower rates, replacing baby boomers in the workforce. In addition, the share of people receiving disability insurance benefits is projected to continue increasing; people who receive such benefits tend to participate in lower rates. Third, the marriage rate is projected to continue declining, particularly among men, and single men tend to participate at lower rates than married men.

Three trends are expected to offset the downward pressure on the labor force participation rate. First, the population is become more educated, which tends to increase the labor force participation rate. Also, the racial and ethnic composition of the population is expected to change in ways that will increase participation in the labor force. Lastly, as longevity increases, people are expected to stay in the workforce longer.

It’s hard to know the net effects of these future trends in Oregon and their impact on the labor force participation rate. The change in the population’s age structure will affect services, infrastructure, and business needs for workers to fill the jobs left by nonparticipants.

The Data

The PRC forecasts are generated at the county level (and some sub-county levels) in three main stages. First, historical and recent data are compiled and evaluated to determine demographic and other trends in the area and to obtain a population base from which to launch the forecasts. Second, assumptions are made about demographic and housing trends in the future and the forecasting model is calibrated by adjusting rates or trends within the model. Finally, the forecast is adjusted so that the sum of the sub-area forecasts is consistent with the forecast for the county as a whole.

The PRC lists a few points to keep in mind when interpreting their population forecasts. Variations in forecasts become larger in the long run, because as the years go by the forecasts depend increasingly on assumptions about who and how many persons will move in and out of particular areas and the number of births that will occur annually to parents who reside in the area. Population forecasts become less certain over time. Given that these forecasts are developed for long-term trends, they are conservative and do not assume drastic changes to the population trends, such as those seen in a recession.

Additionally, the smaller the population, the harder it is to develop an accurate forecast. Slight unpredicted variations in demographic trends can cause greater fluctuations in these population forecasts than those for larger populations. Forecasts for large cities and counties tend to be more precise than forecasts for small cities or towns.

The PRC cautions that it is best to consider that there is likely to be some variation around the numbers and that they will need to be updated as conditions evolve.

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