The demographic component of the REMI model uses a “cohort-component” method to forecast the population for a region. The components of demographic change are calculated every year for each of the age cohorts by sex and race. The population at the end of the year is equal to the population at the beginning of the year (starting population) plus births and net migration, minus deaths. The rate of change for each of the components depends on both observed historical trends in the region and on forecasted national trends. There are also several types of special populations that have different characteristics than the rest of the population and need to be treated differently. They are military, military dependents, prisoners, and college students.
This paper focuses on the effect of demographic composition on state-level forecasts of labor force participation rates, and on the dynamic response of labor force participation rates to a change in employment opportunity.