The Massachusetts Economy: 1993, Today, and 2021 Presentation to - - PowerPoint PPT Presentation

The Massachusetts Economy: 1993, Today, and 2021

Presentation to MassEcon January 19, 2018

Alan Clayton-Matthews School of Public Policy and Urban Affairs Northeastern University NEEP, MassBenchmarks

1993

2,500 2,700 2,900 3,100 3,300 3,500 3,700 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Payroll Employment, Massachusetts (thousands)

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

Massachusetts Unemployment Rate

• 80,000
• 60,000
• 40,000
• 20,000

20,000 40,000 60,000 919293949596979899000102030405060708091011121314151617181920 Number of Persons in Year Ending July 1 Source: Census Bureau: Population Estimates Branch

Net Migration into Massachusetts

International Domestic

not available not available

62 63 64 65 66 67 68 69 70

76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Labor Force Participation Rate, Massachusetts

Manufacturing has decreased as a share of Massachusetts payroll employment, while health services and professional services have increased. 1993

Construction 3% Manufacturing 15% Trade, Transportation, Utilities 18% Information 3% Finance 7% Professional Services 12% Education 4% Health & Social Services 13% Leisure & Hospitality 8% Other Services 3% Government 14%

2016

Construction 4% Manufacturing 7% Trade, Transportation, Utilities 16% Information 3% Finance 6% Professional Services 15% Education 5% Health & Social Services 17% Leisure & Hospitality 10% Other Services 4% Government 13%

8

Educational Attainment

Percent of Resident Population 25 Years and over with at Least a Bachelor’s Degree, 1940-2015

Source: U.S. Census Bureau; 1940-2000: Decennial Census; 2005-2015: American Community Survey, 1-year estimates

Today

3.3 3.9

• 1.1

9.2

• 2.0

0.2 4.9 2.0 1.1 4.9 5.9 3.3 3.0 3.2 2.7 1.6 0.5 0.6 2.2 2.8 1.8 1.2 3.1 3.0

• 4.0
• 2.0

0.0 2.0 4.0 6.0 8.0 10.0

2015 2016 2017 2018 Quarterly Growth at Annual Rates (%)

Growth in Real Product, Massachusetts vs. U.S. Massachusetts U.S.

Source: U.S., Bureau of Economic Analysis (BEA); Massachusetts: through 2017Q1, BEA; 2017Q2 and later, MassBenchmarks. Projected

Economists see corporate tax changes as a bigger “game changer” than the personal income tax changes.

12

Bachelor’s Degree Status

Source: U.S. Census Bureau, American Community Survey, S1501 (Educational Attainment), 1-year estimates; UMDI analysis Note: The Boston-Cambridge Region consists of Middlesex and Suffolk counties.

Share of the Population 25 and over with at Least a Bachelor’s, 2005-2015

13

Sector Concentrations by Region

Source: U.S. Census, County Business Patterns; UMDI analysis Note: The Boston-Cambridge Region consists of Middlesex and Suffolk counties.

Sector Strength in Boston-Cambridge Region and the Rest of State, 2015

Boston-Cambridge Region Rest of State

20 40 60 80 100 120 140 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44

Fertility Rate: Births per 1,000 Women, by Age, 2013-2015

Massachusetts U.S. Source: National Center for Health Statistics (NCHS)

1.00 10.00 100.00 1,000.00 10,000.00 100,000.00

Mortality Rates per 100,000 Population, 2013-15

New England U.S.

Labor force participation rates are higher in Massachusetts at all age cohorts except for the college-aged.

10 20 30 40 50 60 70 80 90 100

16-19 20-24 25-34 35-44 45-54 55-59 60-61 62-64 65-69 70-74 75-79 80+

Labor Force Particpation Rates, Females, Last 48 Months

MA U.S. Source: Current Population Survey 10 20 30 40 50 60 70 80 90 100 16-19 20-24 25-34 35-44 45-54 55-59 60-61 62-64 65-69 70-74 75-79 80+

Labor Force Particpation Rates, Males, Last 48 Months

MA U.S.

On net, Massachusetts’ population growth is boosted by migration, yet more people leave the state than come to Massachusetts from other states.

Immigration is key to the state’s future labor force growth.

• 4,000
• 3,000
• 2,000
• 1,000

1,000 2,000 3,000 4,000 5,000 6,000

<15 15-19 20-24 25-29 30-34 35-54 55-64 65+

Average Annual Net Migration by Age, Massachusetts, 2011-2015

Domestic Domestic + International

Source: American Community Survey, PUMS; calculations by author.

2021

Labor force growth will slow, constrained by an aging population.

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2014 2015 2016 2017 2018 2019 2020 2021

Population and Labor Force Growth, Massachusetts (Percent growth from prior year)

Population Labor Force Souce: Census Bureau, Bureau of Labor Statistics (2014-16); NEEP (2017-21)

Despite attaining a full-employment economy…

7.2 6.7 6.6 5.7 4.8 3.7 3.9 3.7 3.7 3.7 3.7

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Unemployment Rate, Massachusetts

Source: 2011-2016: BLS; 2017-2021: NEEP

…employment growth will be constrained by the number of available workers.

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 2014 2015 2016 2017 2018 2019 2020 2021

Total Payroll Employment, Percent Growth from Prior Year

Massachusetts Payroll Employment U.S. Civilian Employment Source: Federal Reserve Board (U.S.), NEEP (Massachusetts)

Construction will be the fastest growing sector, but health services and skilled business sectors will add the most jobs.

0.5% 0.9% 0.8% 1.4% 1.3% 0.8% 0.3% 0.5%

• 0.4%

1.7% 0.9%

• 0.5%

0.0% 0.5% 1.0% 1.5% 2.0% Government Other Services Leisure & Hospitality Education & Health Services Professional & Business Services Financial Activities Information Trade, Transportation, Utilities Manufacturing Construction Total Nonfarm employment (000's)

Average Annual Growth by Employment Sector, 2016-2021, Massachusetts

Source: NEEP

Improvements in productivity will enable output and incomes to grow faster than employment.

0.2%

• 1.8%
• 0.3%

1.7% 0.3% 0.9% 1.1% 1.3% 1.5% 1.6%

• 2.5%
• 2.0%
• 1.5%
• 1.0%
• 0.5%

0.0% 0.5% 1.0% 1.5% 2.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Growth in Output per Payroll Worker, Massachusetts

Source: 2012-2016: BEA, BLS; 2017-2021: NEEP