February 15, 2001

North Dakota’s Growing Elderly Population Influences Transfer Payments

North Dakotans received nearly $2.33 billion in transfer payments in 1999, an increase of 1.8 percent from the $2.29 billion paid in 1998 according to the recent Economic Brief released from the North Dakota State Data Center at North Dakota State University. Transfer payments are income received by individuals for which they did not render services. They are payments by government and business to individuals and nonprofit institutions serving individuals.

Of total transfer payments, 95 percent were government payments to individuals. Retirement and disability payments accounted for slightly less than half of individual payments in 1999. Retirement payments amounted to $1.09 billion, an increase of 1.5 percent from the $1.07 billion in 1998. "This sizeable portion of income reflects the growing elderly population in our state. Nearly 16.5 percent of the state’s population is older than age 65. In the majority of counties, especially the small rural counties, seniors represent more than 1 in 5 residents. Not surprisingly, therefore, retirement income represents more than 7 percent of all income generated in the state and in 22 of the state’s 53 counties this proportion is more than 10 percent," said Richard Rathge, director of the center.

Medical payments (consisting of Medicare, medicaid and other medical vendor payments, and military medical payments) accounted for 37.1 percent of the state’s total transfers to individuals. Slightly more than $823 million was paid to North Dakotans in 1999 in medical payments, a decrease of 0.1 percent from the $824 million paid in 1998. "If one combines retirement benefits with medicare, then nearly 11 percent of the state’s total income is generated by transfer payments to seniors and this proportion is more than 15 percent for 21 of 53 counties in the state. In brief, seniors are a significant contribution to the economy of the state," said Rathge.

Income maintenance programs (such as supplementary security income, family assistance, and food stamps) comprised the third largest category of individual transfer payments accounting for 6.4 percent of the state’s individual transfers. Income maintenance payments rose to $155 million in 1999, an increase of 8.9 percent from the 1998 level. The remaining 7.1 percent of North Dakota’s individual transfers included unemployment insurance benefit payments, veterans benefit payments, and federal education training and assistance payments.

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Source: Richard Rathge, (701) 231-8621, richard_rathge@ndsu.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu

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