Publication Type: Not Available
Authors: Dewey, James F; Denslow, David
Division: Economic Analysis
By 2030, approximately 26% of Floridians will be age 65 or older, up from 17% in 2010. In standard regional general equilibrium models, retirees and the local workers who produce goods and services for them drive up housing prices and thus crowd out workers that produce for export beyond the local area. Job skill in Florida’s metropolitan statistical areas (MSAs) in 2004 (before the peak of the housing bubble and ensuing crash) was 4 percentage points below the na-tional average, using national average pay as a measure of occupational skill. Half of the short-fall is attributable to Florida’s specialization in serving retirees and another third is attributable to lower shares of college graduates, which is in turn related to retiree specialization. As an exam-ple of less direct mechanisms through which retirees may make an area less suited to high-skill jobs, the elasticity of airline departures with respect to the retiree share of the local population is estimated to be –4.2. By 2030, approximately 40% of voters in Florida will be age 65 or older, magnifying their impact on policies affecting job skill. The population of retirees will be spatial-ly concentrated, with about one third of Floridians living in counties where 30% or more of resi-dents are age 65 or older. Absent urgent and aggressive policy intervention, Florida’s workers that retire over the next 20 years are likely to be replaced by less educated and less skilled work-ers less suited to the knowledge economy, and the gap between Florida’s average job skill and the national average is likely to widen substantially.