Hawaii’s Generational Economy: Economic Impacts of Aging

Both Hawaii and the United States will experience substantial population aging over the coming decades. Hawaii’s elderly may face substantial challenges in meeting their needs. Federal programs, like Medicare and Social Security, will be difficult to sustain. State and County governments may find it increasingly difficult to help. The impact on seniors may rebound on younger generations who depend on seniors and provide care and support as family members and taxpayers. As the working-age population grows more slowly, economic growth may slow. The effects are significant in part because they are lasting. This distinguishes them from recessions that may have more significant effects for a year or two but much smaller effects over longer periods of time.

Although the situation may appear to be bleak, we need to understand the severity of coming changes and the steps that can be taken in response. Are there important ways the adverse impact of aging can be mitigated? And are there positive aspects of aging that will compensate for some of the challenges that lay ahead? A generational perspective is central to understanding our lives during childhood, prime adult ages and old age. High quality data is essential to assess whether our citizens will be fully prepared for the future.

The goal of this study is to establish a framework for quantifying the generational economy at the state level, documenting how people at every age acquire and use resources to meet their own needs, to support others, and to provide for the future. The study made baseline estimates for Hawaii and combined these estimates with population data to project key economic series to 2060. Drawing on these detailed estimates, it highlights some of the most important trends in Hawaii and critical issues that must be addressed with urgency.