State’s population growth all depends on migration

Non-native residents have long fueled New Hampshire’s economy

As Kenneth Johnson, senior demographer at the Carsey School of Public Policy at the University of New Hampshire, puts it, “migration is the wild card, the big unknown” when it comes to the growth of New Hampshire’s population. That said, he added: “I do not make population projections.” For those who do, the stiffest challenge is anticipating the movement of people. 

Migration, first from foreign countries and then from other states, has etched the demographic profile and set the pace of population growth in New Hampshire for the past 150 years. Among the states east of the Mississippi River, only the District of Columbia and Florida have smaller proportions of native-born residents than New Hampshire, where 44 percent and a third of residents aged over 25 were born elsewhere.

With the state’s population crawling at a snail’s pace, the recent announcement by the Census Bureau of the biggest increase in numbers since 2005 signaled that migration, after languishing since the turn of the century, has again begun contributing to population growth.

The bureau estimated that between July 2016 and July 2017 the state added 7,800 residents — a 60 percent increase year-over-year — and that 4,700 more people moved in than moved out — 1,800 more than the year before. Another 2,200 people immigrated to New Hampshire from overseas, and there were 900 more births than deaths. 

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“Migration trends are reverting to past experience,” said Johnson. But, while “net migration is positive,” it’s “at a modest rate.” 

Economic effects

As the state industrialized after the Civil War, French-Canadians from the north and European immigrants from the south flocked to the mills. By 1890, a fifth of the 376,500 residents counted by the census were born abroad, a share that rose to 22 percent in 1910, before slipping to 18 percent in 1930, when those of foreign birth or ancestry represented 60 percent of the population of 465,300.

Net migration — the difference between those moving in and out of the state — fueled three decades of unprecedented growth beginning in 1960 that carried the population past a million by 1990. With the opening of the turnpike and interstate highway systems, flows of migrants, particularly from Massachusetts, boosted successive population increases of 130,800 (21.5 percent) in the 1960s, 182,900 (24.8 percent) in the 1970s and 188,600 (20.5 percent) in the 1980s.

In each of those decades, net migration accounted for well over half — three-quarters in the 1970s — of the growth. Despite turning negative in the recession of the early 1990s and falling far off the pace of prior decades, migration still accounted for the largest share of population growth in the 1990s. 

But after the turn of the century, the number of people moving to the state fell while the number leaving rose, shrinking net migration from 10,700 in 2001 to 2,200 in 2006, a decrease of 79 percent.

Migration in both directions slowed during the Great Recession. Rising unemployment and tumbling home values, Johnson said, “froze people in place.” However, from 2007 to 2012, New Hampshire lost more residents to other states than it gained from them, and population growth, prodded only by the waning natural increase of an aging population, slowed to a crawl. 

“The key driver of the sharp decline in population growth,” was the volatility of net migration,” Johnson wrote.

Johnson also has shown that migration has significant economic effects. Between 2001 and 2004, net migration totaled 16,100 as 127,900 people moved to and 111,800 moved out of the state. Altogether, exiting households earned about $3.41 billion compared to the $4.46 billion of those arriving, which represented a gain of $1.05 billion. From 2004 to 2007, when net migration shrank to 3,900, the increase in income fell to $637 million and between 2007 and 2010, when 5,500 more people left than entered the state, it dropped to $46 million.

2040 projections

Economist Brian Gottlob of Dover-based PolEcon Research has pointed out that, although the migration rate has fallen more sharply in New Hampshire than in all but three other states, interstate migration has slowed across the country. At the same time, immigration from abroad has had an economic impact beyond its numbers.

The state’s 76,000 foreign-born residents comprise 6 percent of the workforce, but 40 percent of those aged 25 and above hold bachelor’s or higher degrees, nearly half of them in a STEM (science, technology, engineering and mathematics) field. Immigrants hold a fifth of all jobs in information technology and healthcare.

The most recent (2016) projections, prepared for the Office of Strategic Initiatives in association with RSL Demographics of Rensselaerville, N.Y., calculate that from 2010 to 2040 the state’s population will grow by 116,500 — from 1,316,500 to 1,432,700 — an increase of 8.8. percent. 

Net migration accounts for all of the growth. Over the span of the projection, deaths are expected to outnumber births by 43,000 as the number of births falls from 66,000 in 2010-2015 to 65,000 in 2035-2040 while the number of deaths climbs from 56,500 to 96,000 over the period. By 2040, deaths will top births in all 10 counties, according to the projection. 

However, net migration is projected to rise to a total of 162,400 by 2040. After adjusting for “special populations” — college students, military personnel and prison inmates, which skew fertility and migration rates — the population is projected to increase by 116,500.

Net migration was projected based on three scenarios, each assuming the rate of migration would vary among the 10 counties. First, it was assumed that the pace of migration between 2000 and 2005 would be reached by 2030 and then remain constant in six counties — Carroll, Hillsborough, Merrimack, Rockingham, Strafford and Sullivan — on the strength of “development patterns and job growth” after 2010. Second, it was assumed that net migration would rise to the same level in Belknap, Coos and Grafton counties by 2040. Finally, net migration in Cheshire County would return to the rate posted from 1995 to 2000 by 2040. 

According to the Internal Revenue Service, net migration declined from 10,700 to 2,600 and totaled 30,200 during the five years between 2000 and 2005. 

Johnson described the projected rate of net migration as “modest,” suggesting that it could ease pressure on the labor market without significantly affecting the aging of the population. The number od people aged over 65 is projected to rise from 178,300 in 2010 to 408,500 by 2040 and swell from 13.5 percent to 28.5 of the population. 

Cost of living

Before the start of the 21st century, migration followed two streams, one predominantly of well-educated, working individuals and couples in their 30s and 40s — often with children — settled in the so-called “metropolitan” counties of Rockingham, Hillsborough, Merrimack and Strafford, which together have paced the state’s population growth. 

The other, fewer in number, consisted of adults in their 50s and 60s, drawn to the Lakes Region, Upper Valley and Mt. Washington Valley, where they purchased homes for their retirement or turned a seasonal home into a primary residence. Johnson suggests this influx will continue as the last of the baby boom generation turns 65 in 2030.

This pattern is projected to persist. The “metropolitan” counties are projected to account for nearly two-thirds of net migration between 2010 and 2040, with Rockingham County setting the pace with nearly 40,000 migrants, followed by Merrimack with some 32,000 and Hillsborough and Strafford with 16,000 apiece. Grafton County, with 19,600 newcomers, Belknap, with 14,400, and Carroll, with 13,000, represent nearly 30 percent of net migration. Cheshire, Sullivan and Coos counties account for the balance. 

To the extent that differential costs of living serve as an incentive to migrate, New Hampshire still enjoys an advantage over its neighbors in southern New England.

The Family Budget Calculator of the Economic Policy Institute reports that for two adults with two children, the annual cost of living in Boston-Cambridge-Quincy in Massachusetts is $113,558 compared to $83,672 in the Manchester metropolitan area. The widest disparities are approximately $500 per month in the cost of housing and state and local taxes, which are twice as high in Massachusetts. 

The Living Wage Calculator of the Massachusetts Institute of Technology finds that two adults and two children living in Boston-Cambridge-Newton require an after-tax income of $67,000 while their counterparts in Manchester-Nashua must earn $58,000. The MIT calculator also finds a disparity of $5,600 in monthly housing costs, but a disparity of just $1,264 in the annual tax burdens of $9,349 in Massachusetts and $8,085 in New Hampshire. Moreover, a comparison of salaries and wages for nearly two dozen professions and occupations indicates that compensation in Massachusetts is generally between 10 and 15 percent higher than in New Hampshire. 

Gottlob has pointed out that, since the 1980s, only three states have seen migration rates fall as sharply as in New Hampshire, where they had much further to fall. At the same time, he noted that interstate migration has slowed across the country, and that seeking to attract individuals and families as well as businesses to the state will be bucking a national trend.