Commentary: Delaware’s demographics signal a death spiral

By Charlie Copeland
Posted 5/31/22

In 2011, the Caesar Rodney Institute published an analysis showing Delaware’s 2007-09 migration trends. At that time, Delaware was gaining citizens from high-tax, low-growth Northeastern states …

You must be a member to read this story.

Join our family of readers for as little as $5 per month and support local, unbiased journalism.

Already a member? Log in to continue.   Otherwise, follow the link below to join.

Please log in to continue

Log in

Commentary: Delaware’s demographics signal a death spiral


In 2011, the Caesar Rodney Institute published an analysis showing Delaware’s 2007-09 migration trends. At that time, Delaware was gaining citizens from high-tax, low-growth Northeastern states (two-thirds of in-migration coming from New Jersey, New York, Massachusetts and Pennsylvania), while losing residents to low-tax, high-growth Southern states (two-thirds going to North Carolina, Florida, South Carolina, Kentucky and Tennessee).

This report updates that analysis using U.S. Census Bureau data for the years 2010-20 and adds an overlay of age demographics to better interpret the data.

Retirees moving in from the Northeast

Delaware continues to gain residents from the moribund and declining Northeast. But the reason is probably not due to economic opportunity but for retirement purposes.

During the last decade, Delaware’s in-migration trends have become more concentrated, with over 76.2% of Delaware’s net in-migration coming from three states: Pennsylvania, New Jersey and New York.

Why does CRI assume that these migrants are coming to retire in Delaware? Because during this same time period, Delaware is reported by some to be the fourth most rapidly aging state in the nation, as measured by the growth rate in the 65-plus age cohort. Delaware now has the fifth largest percentage of population over 65 years old in the country at 20%.

From 2010 to 2020, Delaware’s 65-plus population grew to become 20% of the state’s population, ranking fifth highest in the nation.

And where do these new Delawareans live? During this decade, Sussex County’s population grew by 22.6% and Kent County's by 13.1%, but New Castle County only grew by 4.3%, which is less than one-half of 1% per year.

Given this data, it is likely that most of this net in-migration are retirees. It is important to note that Delaware has significant tax incentives for retirees (both on income and real estate), along with relatively inexpensive real estate prices. Incentives matter.

The young and working age moving south and west

With retirees relocating from the expensive Northeast, where are Delawareans moving out of state going?

The answer to this question is a bifurcated one. A decade ago, two-thirds of our out-migration was heading to the Southern states. Today, the answer is more complicated.

While just under 50% of our net out-migration is still heading to states like Florida, Texas and Georgia, another approximately 20% is moving to the West Coast — Oregon, Washington and California.

Could these out-migrants be the sign of a “brain drain,” as our working-age population seeks jobs in the tech industry? The reason to ask this question is that Delaware’s working-age population (25-64) has been relatively flat over the last decade, growing at far less than 1% per year.

Furthermore, the under-25 population has declined by over 3% during this period. Delaware now has the seventh smallest youth population in the nation on a percentage basis — tied with Oregon.

The full picture means no economic growth for Delaware

Irrespective of why young people are leaving Delaware while retirees are moving in, these are very bad demographic trends. The following chart shows 2010 versus 2020 age breakdown in Delaware.

Fundamentally, economic growth requires increases in worker productivity. With retirees moving in, youth moving out and a flat working-age population, Delaware will not experience increases in productivity. Our economy is in a negative spiral.

For over a decade, CRI has presented policy options in education reform, tax reform and regulatory reform that could have ameliorated these trends. CRI has been largely ignored.

On June 7, Delaware state leaders from business, government and related entities will gather in Dover for the Delaware State Chamber of Commerce End-of-Session Policy Conference. This meeting is a chance for these leaders to make a coolheaded appraisal of where Delaware is and where it is headed, and to embrace different policy ideas to change direction and remake Delaware as the “Small Wonder.” It happened under Gov. Pete du Pont in the 1980s. It is time again.

Charlie Copeland is director of the Center for Analysis of Delaware’s Economy & Government Spending at the Caesar Rodney Institute.


Members and subscribers make this story possible.
You can help support non-partisan, community journalism.