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Cheating Demographic Doom: Pittsburgh Exceptionalism and Japan's Surprising Economic Resilience

Don't judge a metro or a nation-state by its population numbers.
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Pittsburgh, Pennsylvania. (Photo: Sakeeb Sabakka/Flickr)

Pittsburgh, Pennsylvania. (Photo: Sakeeb Sabakka/Flickr)

If demography is destiny, then Pittsburgh is screwed. Same goes for Japan, perhaps doubly so. Pittsburgh's problem:

For cities, being family friendly may become increasingly important as the large millennial generation starts entering their 30s, the primary years for raising children. In order to identify the parts of the country where new families are being formed most rapidly, we turned to demographer Wendell Cox. He crunched the data on the changes in the number of 5- to 14-year-olds since 2000 in the nation’s 52 largest metropolitan statistical areas. ...

... The largest declines in the 5 to 14 cohort since 2000 have almost all occurred in the large coastal metropolitan centers, led by Los Angeles, 46th out of the 52 cities on our list, where the child population has dropped by 303,000, or 15.3%, since 2000. In the New York metro area (40th), the number of 5- to 14-year-olds fell by 238,000.

Economics alone does not explain this. Some of these metro areas, notably New York and Boston (38th, -8%), have done fairly well in the aftermath of the Great Recession. Yet they are only doing marginally better in attracting families than the (mostly) hard-hit metro areas at the bottom of our list: Buffalo and Rochester, N.Y., Pittsburgh and Detroit. (New Orleans actually ranked last behind Buffalo, but that’s a function of population flight due to Hurricane Katrina.)

In fact, Pittsburgh holds the dubious distinction of having the lowest share (10.8 percent) of children among the 52 largest metros. Imagine this cohort aging in place, no one leaving or arriving. Without the benefit of migration, Pittsburgh will become the smallest of the big metros.

Regarding migration, Pittsburgh (on net) doesn't do too well on that score. People aren't exactly lining up to move into the Rust Belt of Flyover Country. At best, the region can claim a break even stability. (Which is a vast improvement over the demographic hangover from the exodus of the 1980s.)

Pittsburgh struggles to attract families. Check. Pittsburgh lags behind all other big metros in percentage of population aged five- to 14-years-old. Check. Now get a load of "Where Young College Graduates Are Choosing to Live":

And as young people continue to spurn the suburbs for urban living, more of them are moving to the very heart of cities — even in economically troubled places like Buffalo and Cleveland. The number of college-educated people age 25 to 34 living within three miles of city centers has surged, up 37 percent since 2000, even as the total population of these neighborhoods has slightly shrunk.

Some cities are attracting young talent while their overall population falls, like Pittsburgh and New Orleans. And in a reversal, others that used to be magnets, like Atlanta and Charlotte, are struggling to attract them at the same rate. ...

... Other cities that have had significant increases in a young and educated population and that now have more than their share include San Diego, Baltimore, Pittsburgh, Indianapolis, Nashville, Salt Lake City and Portland, Ore. ...

... How many eventually desert the city centers as they age remains to be seen, but demographers predict that many will stay. They say that could not only bolster city economies, but also lead to decreases in crime and improvements in public schools. If the trends continue, places like Pittsburgh and Buffalo could develop a new reputation — as role models for resurgence.

The parts of the article about where young and college-educated adults are "headed" puts demographically challenged Pittsburgh in a flattering light. I put "headed" in scare quotes in reference to the methodology for the study generating the publicity. From the data, we can't be sure where young college graduates are choosing to live. We do know where the population of young college graduates is growing and how fast it is growing (2000-12). I would be careful about inferring migration from such numbers. I'd be careful about over-interpreting the population change. A cautionary note from the author of the study (PDF):

While population change is influenced in part by migration, it is also influenced by other factors as well. Most importantly, our key metric compares the locations of one cohort those born in 1966 through 1975, when they were 25 to 34 in 2000, with the locations of the subsequent age cohort—those born in 1976 through 1985 when they were 25 to 34 in 2010. As a result, this change over time is influenced by the relative size of the age cohorts “aging into” and aging out of this age group in each metro area over the course of the decade, as well as by net domestic migration, and also international migration. The number of college educated young adults in each period is also influenced by changes in the college-going rate of young adults in each region.

Some metro regions with large populations of five- to 14-year-olds can age into a boom of college-educated young adults that gets misinterpreted as net in-migration. Judging the press coverage of the report I've read thus far, the results are misunderstood. Concerning Pittsburgh, the region benefits from neither a wealth of children who could age in place nor a substantial influx of recent college graduates. The last sentence in the above passage offers a clue to solving Pittsburgh's demographic paradox.

Pittsburgh universities and colleges saw the demographic handwriting on the wall. There wouldn't be enough local high school graduates to fill the seats in freshmen classes. So these institutions of higher learning set out to export services and attract high school graduates from outside of the traditional market (i.e. New Jersey). Higher education went from non-tradable to tradable as a matter of survival. The metro was increasingly untethered from the local supply of children. Hence, "Some cities are attracting young talent while their overall population falls, like Pittsburgh." As more imported college freshmen stay put after graduation, Pittsburgh looks like a winner for attracting young talent.

Pittsburgh is on the cutting edge of what Paul Gottlieb called "growth without growth." While population remains flat or declines, per capita income (i.e. prosperity) increases. Gottlieb breaks with the conventional wisdom (that's still in vogue today) that a growing population is a primary indicator of economic health. As some research has already shown, population growth is a poor indicator of productivity growth. Yet metros continue to obsess population change while ignoring better direct economic indicators. Pittsburgh has had no such luxury and developed policies more in line with the global reality of demographic decline.

Speaking of the global reality of demographic decline, Japan (like Pittsburgh) is leading the way:

Japan’s population is shrinking and getting older, with the population falling at a 0.2 percent rate this year and the working-age population (ages 16 to 64) falling at a much faster rate of almost 1.5 percent. In contrast, the U.S. population is rising at a 0.7 percent annual rate and the working-age population is rising at a 0.2 percent rate. So far, supporting the growing share of Japan’s population that is 65 and over has been the substantial increase in the share of working-age women entering the labor force. In contrast, U.S. labor force participation rates have been falling for both men and women. Japan’s labor market adjustments help explain the steady, albeit, modest growth in output per person despite the surge in the 65 and over cohort. Indeed, Japan has been able to match U.S. per capita growth since 2000.

Japan sports economic growth (without population growth) on par with the United States, which boasts an expanding overall population as well as workforce. The Federal Reserve Bank of New York goes on to explain that while workforce participation rates for U.S. women and men are falling, Japanese women are increasingly finding employment. A similar story unfolded in Pittsburgh in the wake of steel's collapse in the early 1980s. Thus, a labor force can gain substantial numbers while the overall population declines. Furthermore, the labor force can become better educated and thus more productive. Adding women with college degrees to the labor pool can inform an economic pop in places where we wouldn't expect to find them.