Hawaiʻi’s population is rapidly aging, with one in four residents expected to be 65 or older by 2035. This presents significant economic challenges for the state, according to a new report by the University of Hawaiʻi Economic Research Organization (UHERO).
The report, examining Hawaiʻi’s generational economy, revealed that the state faces critical challenges in supporting its growing senior population while maintaining economic stability for younger generations.
“The 2022 generational economy has changed in important ways since 2012, the first year for which it was estimated,” the report stated. “Per-capita consumption of working-age adults grew slowly, but stagnated or declined for seniors and children. Older children and younger seniors were hurt more than any other group. The effects are likely to be long-lasting as spending on education declined for children and saving declined for kūpuna.”
The study projects that the gap between what seniors consume and what they earn from labor will nearly double from 11% of total labor income in 2010 to 23% by 2050, with the most significant increases occurring before 2035.
Researchers identified four key challenges: strengthening economic security, building a more robust healthcare system, improving pension wealth accumulation, and investing in children who will drive future economic growth.
The aging trend began in 2011, when the oldest baby boomers turned 65, and is expected to continue accelerating for another decade. Demographic projections assume steady increases in life expectancy, stable fertility rates and moderate migration.
The report warns that economic prospects will suffer without significant investment in younger generations, emphasizing the need for policies that address the distinctive needs of an aging population. The study recommends a balanced approach to resource allocation, considering the economic needs of children, working-age adults and seniors.
Read the entire report on UHERO’s website.
UHERO is housed in UH Mānoa’s College of Social Sciences.
