RETIREES IN RURAL AREAS: IMPLICATIONS FOR THE RURAL

ECONOMY

Judith I. Stallmann

January 24, 2002

Beginning a Research Project

An overview paper Helps me organize what is known

in the area—more detail than a standard literature review.

Pinpoint where further research is needed.

Types of Retirees

Amenity

Assistance

Aging in Place

Upper and middle (some lower) income, newly retired, healthy, married

Middle and lower income, older, poor health, widowed

Middle and lower income, all ages, mix of health and marital statuses

Retirement Communities

Resource amenity

Planned

Seasonal

Old home town

Regional center

Continuing care

Definitions We defined a retirement community as

having a net in-migration of retirees.

We used a sub-county definition.

This definition does not include communities with a high percentage of retirees who age in place.

Retirement Communities

Resource amenity

Planned

Seasonal

Natural or man-made amenity

Natural and social amenity, planned

Natural amenity—climate

Retirement Communities, cont.

Old home town

Regional center

Continuing care

Social ties & living assistance

Social ties & living assistance, man-made amenities

Living assistance & medical care

Typology

Show how the same community had different names

Provide an exhaustive list of types of retirement communities

Show the type(s) of retirees attracted to each community

Uses to communities

Allow community to assess their potential to attract retirees, the type of retiree they might attract and the type of recruiting needed.

Existing retirement centers to assess whether retain their attractive features.

Analyze their future prospects, both positive and negative.

Future IssuesResource amenity

Planned

Seasonal

Old home town

Regional center

Continuing care

Growth management, loss of amenity

Growth management, infrastructure quality

Seasonal demands and congestion

Development of critical mass

Development of critical mass

Financial solvency

Potential demographic impacts

Depression Boomers Bust

Amenity

Planned

Seasonal

Old home

Regional

Continuing care

Predicted demographic impacts

Depression

1990-2010

Boomers2010-30

Bust

2030 +

Amenity -- + --

Planned -- + --

Seasonal -- + --

Old home 0 + M-- /S+

Regional -- + M-- /S+

Continuing care + + +

Predicted impacts

Soc. Sec . & Pensions

Assets & Housing

Living Preference

Amenity -- -- --

Planned -- -- R-- / U+

Seasonal -- -- 0

Old home 0 0 --

Regional -- 0 0

Continuing care -- -- 0

Quasi-experimental design to

Compare impacts of wealthier and poorer retirees

Compare impacts as retirees age

Estimate both economic and fiscal impacts

Five groups of retirees All persons 65 and older: assumes

homogeneity of elderly (the comparison group) 65-75: young, healthy, active, married; 76 and older: aging, poor health, more likely

widowed elderly--assistance seekers; Income below $20,000: low-income elderly,

those who who age in-place; Income over $50,000: retirees most likely to

migrate from an urban to a rural area--amenity seekers.

Findings

All groups generate positive economic impacts

Some of the new jobs go to the elderly Lower population impacts than previous

studies Retail impacts differ All groups had positive fiscal impacts, but

there were differences

Per capita retail sales impacts

High-income: increase per capita retail sales most.

Low-income: increase retail sales per capita only in the apparel sector; high-income: decrease apparel sales.

Over 75: increase per capita retail sales only in apparel and drug stores.

Both high-income and young retirees: increase per capita retail sales in the

building supply sector.

Fiscal impacts are positive

Elderly present few new demands on most local expenditure categories.

Younger retirees tend to have lower per capita government costs than do older. Aging affects the mix of demand for public goods.

Fiscal impacts issues

Accounting stance is important. The results would not be the same for state or federal governments, which bear different costs, such as health care.

The elderly may also affect public budgets by lobbying local officials.

By late 1990s ½ of rural counties had declining

numbers of elderly

Declining numbers of elderly

Net migration of retirees is now rural to urban.

Years of rural out-migration by young, mean currently a very small cohort of new retirees in rural areas.

When very elderly die, the cohort of new retirees (natural and migrant) is not large enough to replace those who die.

Social Security has been described as the largest and

most successful rural development program.

But if we have declining numbers of retirees in rural areas, this has implications, not just for the retirement communities, but for the entire rural economy.

Because of the high percentage of retirees in rural areas (even if they are not a retirement community), retirees have provided a stable economic base for the community.

Extension: Retirement communities

Determine what type of retirement community they are, or if they have potential.

Demographics and implications for growth (or decline) over different time periods

Anticipate issues if they continue to grow, or decline, including demands that retirees make on both public sector and private.

Extension: Rural communities

Communities that are not “retirement” communities, but that for years have had a stable to increasing percentage of elderly who were a “base” in the community.

These are most likely the counties that have a decline in the absolute number of the elderly.

Extension: Rural communities

Their demand for housing–most retirees live in their own homes--maintained property values in communities and local tax rolls.

The retiree population increases demand for certain services, for example medical, which non-retirees also use.

Extension: State

Impact on the state of declining numbers of rural retirees.

State-response to declining retirees in rural areas?

State response to recruitment activities of communities. Does it want to encourage or restrain communities because of costs to the state?

Research agenda

Characteristics of counties with declining numbers of elderly versus stable, or increasing.

Impacts on communities (multipliers work in reverse) if the number of retirees declines?

State versus local economic and fiscal impacts.

State and local policy on attracting retirees and on adjustments to declining numbers of retirees.

RETIREES IN RURAL AREAS: IMPLICATIONS FOR THE RURAL

ECONOMY

Judith I. Stallmann

January 24, 2002