increases after 2010 are due primarily to the increase in the number of the elderly, as the baby-boom cohorts begin to reach age 65. At the same time, growth in the working-age population will slow, as smaller cohorts born after the fertility decline of the 1960s come to dominate the labor force.

Under the low net immigration assumption, the dependency ratio will decline to 48 in 2010, increase to a peak of 63 in 2035, and then again decrease, to 62 in 2050. Under the high net immigration assumption, the overall dependency ratio will decline to 48 in 2010 and then increase to a plateau of 61 in 2030.42

We anticipate the evidence presented in Chapter 7 by observing that relative fiscal costs vary by age group. The relative fiscal costs for youths, including education and other programs directed at the population less than 20 years of age, are approximately $1 for every $4 of programs directed at the elderly, including Social Security, health care, and other programs for the population aged 65 years and older. Chapter 7 discusses these fiscal implications of population trends in more detail.

Summary of Effect of Immigration on Age Structure

The age structure of the U.S. population will change over the next 50 years, regardless of immigration. Figure 3.8 displays the absolute change in population at five-year age intervals for our medium, low, and high rates of immigration. Under our medium immigration assumption, between 1995 and 2050, there will be an increase in each five-year age group. Two age groups are particularly noteworthy. First, the group aged 25 to 55 years (the working-age population) will not expand as much as other age groups. Second, there will a rapidly expanding number of elderly persons.

Immigration policy will have a declining influence on the population as the age group considered increases. In the extreme, different immigration assumptions have little influence on the rapid growth of the population aged 80 years and over. The elderly population of 2050 has, to a great extent, already been born and are currently younger working residents. Although a smaller number of immigrants would reduce the elderly population in 2050, lower immigration would not substantially alter the unprecedented increase in the size of the elderly and the oldest-old age groups.

Immigrants and Their Children

The levels of future immigration are obvious key determinants of changes in

42  

Under the zero immigration assumption, the dependency ratio will decline to a minimum of 48 in 2010, peak at 64 in 2035, and again decline, to 62 in 2050. Under the very high immigration assumption, the dependency ratio will decrease to about 48 in 2010 and then steadily increase to a plateau of about 60 in 2030.



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