How our population grows.

• Author: Kinghorn, Matt

Indiana will add roughly 940,000 residents by 2040--a 15 percent increase from 2005, according to the state's official population projections produced by the Indiana Business Research Center. (1) Indiana's population will surpass 7 million by 2030 and should reach 7.2 million in 2040.

Sixty-five of Indiana's ninety-two counties will increase in population, but the ten-county Indianapolis metro area will account for 54 percent of Indiana's growth between 2005 and 2040 (see Figure 1). In fact, five Indianapolis suburban counties can expect to grow by more than 30 percent, led by Hamilton County with an astounding projected increase of 85 percent. Northeast Indiana is another region which can expect to see significant growth. LaGrange, Elkhart, Adams, and Allen counties are each projected to increase by more than 20 percent. Meanwhile, twenty-seven counties are likely to have fewer residents by 2040.

By 2040, one in five Hoosiers will be of traditional retirement age, an increase of 90 percent. Meanwhile, the number of people in the 25-to-54 age group--an important labor force demographic--will decline. The following sections will look closer at how key age groups are changing.

At this juncture, it is important to keep in mind that these projections rely exclusively on recent birth, death, and migration trends. Therefore, they reflect what Indiana and its communities will look like if past conditions persist, and no assumptions have been made about future economic or environmental conditions. In addition, since population dynamics (particularly migration) can be difficult to predict, long-range projections can be subject to significant error; therefore, it is often useful to pay greater attention to trends during the next fifteen to twenty years.

Indiana's Aging Population

The primary force behind Indiana's changing population dynamics is the inevitable aging of the baby boom generation. At present, this group is between the ages of forty-four and sixty-one and, by 2030, this entire cohort will be of traditional retirement age. This fact promises to transform the state.

[FIGURE 1 OMITTED]

Figure 2 illustrates the share of total population by age group over the next thirty-five years. The share of population age 65 and older will increase from roughly 12 percent of the total to nearly 21 percent. During this period, the sixty-five and older population will surpass the 0-14 and 15-24 age groups on its way from the smallest to the third largest of these segments. Each of the other age groups will see its share of total population decline by 2040.

An aging population is not unique to Indiana, of course, but is a national trend. In fact, when compared to the rest of the nation, Indiana is relatively young with a 2006 median age of 36.3, which ranks in the youngest third of all states according to the U.S. Census Bureau. The state's median age is expected to increase to 39.8 years by 2040.

There is a wide disparity in aging patterns among Indiana counties. In 2005, the youngest counties exhibit one of two primary characteristics. There are major college student populations in Delaware (33.5 percent), Monroe (27.9 percent), and Tippecanoe (27.7 percent) counties...