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CONTRIBUTORS

Jennifer Johnston

Director of Research, Municipal Bonds, 
Franklin Templeton Fixed Income

Preview

Falling birth rates are quietly reshaping municipal credit—changing who uses public services, how revenues grow, and where credit strength (or strain) emerges across issuers.

  • Why it matters: Demographic shifts can increase dispersion in credit outcomes—even within the same sector.
  • The core trend: US fertility is below replacement, aging the population and reducing the future school-aged base.
  • K–12 pressure point: Enrollment declines can compress revenues faster than districts can reduce costs, raising budget stress and political friction around consolidation.
  • Charter nuance: Growth in operators increases competition for a shrinking student pool—rewarding scale, demand, and liquidity; challenging weaker credits.
  • Investor takeaway: In a slow-moving but powerful demographic cycle, issuer-level research becomes a key differentiator for long-term risk management.

Jennifer Johnston shares her views in this two-part series. The first segment outlines the demographic backdrop, then translates it into practical credit lenses for traditional public schools, charter schools, and higher education. Part two will focus on the on the Silver Tsunami, examining how the expanding baby boomer cohort is reshaping demand across hospital and senior living sectors and what that means for municipal credit risk and opportunity.

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