The 2020 Long-Term Budget Outlook


Appendix A: CBO’s Projections of Demographic and Economic Trends

The Congressional Budget Office develops its assessment of the long-term outlook for the federal budget on the basis of its projections of demographic and economic factors over the next three decades. The projections presented in this report are consistent with the economic projections for the 2020–2030 period that CBO published in July.1 Those projections incorporate the budgetary and economic effects of the 2020 coronavirus pandemic and associated measures taken to limit in-person interaction. They also reflect the economic and budgetary impact of laws enacted to address the public health emergency and to support households, businesses, and state and local governments. (A set of annual projections is included in this report’s supplemental data; they are available online at www.cbo.gov/publication/56516[32].)

Demographic Factors

Changes in the size and composition of the U.S. population influence the growth of the economy and affect federal tax revenues and spending. Rates of fertility, net immigration, and mortality determine how the population evolves, and the relative contribution of each of those factors changes over time.

CBO expects the population to increase from 334 million people at the beginning of 2020 to 378 million in 2050. Although the population will increase over that period, population growth is expected to decline from an average rate of 0.5 percent per year over the next decade to an average rate of 0.3 percent per year in the last decade of the projection period.

The population is projected to become older, on average, throughout the projection period. In the agency’s projections, the share of the population age 65 or older grows over the 30-year period, whereas the share that is of working age (ages 20 to 64) shrinks. As a result, the ratio of working-age people to people 65 or older falls from an average of 3.1 to 1 over the first decade of the period to an average of 2.5 to 1 during the last decade.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 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 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88

Share