From UPED to REMI: Utah’s Experience in Developing Long-Term Economic and Demographic Projections Utah Governor’s Office of Planning and Budget January 2006

Synopsis of Current Situation ► Utah bought its REMI Policy Insight models in 2002 ► The REMI models replaced Utah’s in-house models, which had been used for over 30 years ► The 2005 Baseline long-term projection series is the first one to incorporate the REMI models

Background of UPED ► UPED combines a cohort component and an economic base model ► It produces projections of population, components of change, households, and employment by industry at the county and state level ► UPED was developed and implemented as Utah’s official projection model in the 1970s ► UPED produced extremely accurate population projections  1970 projection of state population in 2000 within 8% of actual decennial Census count

Historical Data

Utah is in the Center of the Fastest Growing Area of the Country

Utah’s Fastest Growing Counties DAVIS BOX ELDERCACHE RICH WEBER TOOELE SALT LAKE MORGAN SUMMIT DAGGETT UTAH WASATCH DUCHESNE UINTAH JUAB SANPETE CARBON EMERY GRAND MILLARD PIUTE GARFIELD SEVIER WAYNE SAN JUAN IRON BEAVER WASHINGTON KANE 40.0% Increase or Greater Increase of 20.0% % Increase of less than 20% Source: US Census Bureau

Source: U.S. Census Bureau Percent Urban Utah is an Urban State

DAVIS BOX ELDERCACHE RICH WEBER TOOELE SALT LAKE MORGAN SUMMIT DAGGETT UTAH WASATCH DUCHESNE UINTAH JUAB SANPETE CARBON EMERY GRAND MILLARD PIUTE GARFIELD SEVIER WAYNE SAN JUAN IRON BEAVER WASHINGTON KANE ► ► These counties are home to 1,813,669 residents, or 76% of the state’s population. ► ► Three out of every four people in Utah live along the Wasatch Front. Utah’s Population Centers Source: U.S. Census Bureau

DAVIS BOX ELDERCACHE RICH WEBER TOOELE SALT LAKE MORGAN SUMMIT DAGGETT UTAH WASATCH DUCHESNE UINTAH JUAB SANPETE CARBON EMERY GRAND MILLARD PIUTE GARFIELD SEVIER WAYNE SAN JUAN IRON BEAVER WASHINGTON KANE Utah’s Population Centers ► These counties are home to 1,973,207 residents, or 83% of the state’s population. Source: U.S. Census Bureau

DAVIS BOX ELDERCACHE RICH WEBER TOOELE SALT LAKE MORGAN SUMMIT DAGGETT UTAH WASATCH DUCHESNE UINTAH JUAB SANPETE CARBON EMERY GRAND MILLARD PIUTE GARFIELD SEVIER WAYNE SAN JUAN IRON BEAVER WASHINGTON KANE ► These counties are home to 2,169,373 residents, or 91% of the state’s population. Utah’s Population Centers Source: U.S. Census Bureau

Utah Has the Largest Households in the Nation Average U.S. Household Size: 2.59 Utah Hawaii California Alaska Texas Maine A “household is a person or group of persons who live in a housing unit. These equal the count of occupied housing units in a census. Source: U.S. Census Bureau, 2000 Census

Comparing UPED and REMI

Advantages and Disadvantages of UPED Advantages ► Accuracy  8% in 1970  2% in 1980  0.2% in 1984 ► Acceptability ► Institutionalized ► Alternate Scenarios Disadvantages ► Lack of documentation ► Complexity ► Individualized

Advantages and Disadvantages of REMI Advantages ► REMI has been tested and documented ► The design and results are similar to UPED ► Cost savings ► Continued local control ► Customizable Disadvantages ► Data differences  National vs state data ► Assumption differences ► Model “irregularities” ► Demographics is more of a byproduct

Key REMI Model Features ► Structural model that captures all inter-industry linkages ► Is calibrated and estimated using national and regional data ► Is dynamic and predicts when results will occur ► Economic cause & effect relationships explain results ► Is the leading policy analysis model in the U.S.

State of Utah Projections Process Economic Base Model Cohort Component Model Integrated Economic and Demographic Projections

REMI Model Structure Output Market Shares Labor & Capital Demand Population & Labor Supply Wages, Prices, & Profits

2005 Baseline Assumptions/Process

Assumptions

► Population growth is a combination of migration and natural increase. ► Employment drives migration. ► National employment is projected based on U.S. Census Bureau population projections. Growth Analysis

Fertility Rates for Utah and the U.S.

► Migration contributed 22% of population increase from 1950 – 2004 ► During the 1990s, migration rose to 36%. ► Migration projected to be 26% from 2005 – 2035 Components of Change

Process

The employment projection is based on a trend analysis of Utah’s historical share of national employment. Utah’s Share of National Employment

2005 Baseline Process ► Begin with the state model  Incorporate employment using employment update  Incorporate fertility assumptions using policy variable selection ► Disaggregate to the counties using the multi region county model ► Testing and review to assure believability

Washington County Population Growth Analysis

Washington County Population Growth

2005 Baseline Results Employment

Source: 2005 Baseline Projections, GOPB Employment Growth by Decade for Utah and the U.S.

Source: Provisional 2004 Baseline Projections, Governor’s Office of Planning and Budget SIC Major Industries in Utah: 1969 to 2035

NAICS Major Industries in Utah:

Location Quotients: State Employment

Utah Employment by Industry as a Share of Total State Employment Source: 2005 Baseline Projections, GOPB

2005 Baseline Results Population

A 100 Year Look at Utah’s Population Sources: Historical, U.S. Census Bureau; Projected, 2005 Baseline Projections Utah Population 1950 to 2050 Growth

State of Utah Components of Population Change Source: 2005 Baseline Projections, GOPB

Projected Median Age for Utah and the United States Source: 2005 Baseline Projections, GOPB

FemaleMale Source: Provisional 2004 Baseline Projections, Governor’s Office of Planning and Budget Utah’s Changing Age Structure

Female Male Source: 2005 Baseline Projections, GOPB. Utah’s Changing Age Structure

Growth of School-Age Population: 2000 to 2030 Source: 2005 Baseline Projections, GOPB.

Growth of 65 and Older Age Group: 2000 to 2030 Source: 2005 Baseline Projections, GOPB.

Age Group Growth Rate Comparison Source: 2005 Baseline Projections, GOPB.

Historical and Projected Dependency Ratios for Utah and the U.S. Source: 2005 Baseline Projections, GOPB.

Utah Dependency Ratios: 1990 to 2050 Source: 2005 Baseline Projections, GOPB.

U.S. Dependency Ratios: 1990 to 2050 Source: 2005 Baseline Projections, GOPB.

Population by Multi-County District: 1940 to 2030 Source: 2005 Baseline Projections, GOPB

Source: Provisional 2004 Baseline Projections, Governor’s Office of Planning and Budget Population Growth Rates by Multi-County District: 2000 to 2050

Utah Population Annual Average Growth Rates By County 2000 to 2050 State Average = 1.8% Increase of 1.0 to 1.7 Change of less than 1.0 Increase of 2.9 or Greater Increase of 1.8 to 2.8 Box Elder 1.7 Cache 2.2 Rich 0.7 Weber 1.3 Tooele 2.6 Salt Lake 1.2 Morgan 3.8 Summit 3.0 Daggett 0.7 Utah 1.0 Wasatch 2.9 Duchesne 1.2 Uintah 0.5 Juab 1.5 Sanpete 1.0 Carbon 0.9 Emery 0.6 Grand 0.4 Millard 1.7 Piute 0.7 Garfield 1.0 Sevier 0.9 Wayne 1.2 San Juan 0.6 Iron 2.3 Beaver 2.1 Washington 3.9 Kane 1.4 Davis 1.1 Box Elder 1.7 Cache 2.2 Rich 0.7 Weber 1.3 Tooele 2.6 Salt Lake 1.2 Morgan 3.8 Summit 3.0 Daggett 0.7 Utah 1.0 Wasatch 2.9 Duchesne 1.2 Uintah 0.5 Juab 1.5 Sanpete 1.0 Carbon 0.9 Emery 0.6 Grand 0.4 Millard 1.7 Piute 0.7 Garfield 1.0 Sevier 0.9 Wayne 1.2 San Juan 0.6 Iron 2.3 Beaver 2.1 Washington 3.9 Kane 1.4 Davis 1.1

► Utah has a long history of producing timely and accurate long term economic and demographic projections ► Utah has higher rates of economic and population growth than the nation. ► While Utah is becoming more like the nation, it will continue to have unique demographic characteristics that set it apart. ► The REMI models enable Utah to continue to produce quality population projections at the local level Summary

Robert Spendlove Governor’s Office of Planning and Budget E210 State Capitol Complex Salt Lake City, UT