Monday, September 17, 2018

The Consequence of the Great Recession

American women had 4.8 million fewer babies than demographers were expecting.
"Every year when I look at the fertility data I expect the number of births to go up and it hasn't," says University of New Hampshire Professor Kenneth Johnson. Prof Johnson says part of the fertility decline is attributable to women in their early and late 20s having fewer children than expected. "There were a group of women who were in their early 20s at the beginning of the Great Depression who never made up for the births that they didn't have. More of them are childless than any group of American women before or since."
In the UK, research commissioned by the BBC found that people who are 30-39 years old now were worst affected by the financial crisis - losing on average 7.2% in real terms, or £2,057 ($2,684) a year between 2008 and 2017. That's pretty similar to what happened in the US.
Americans born in the mid-1980s have accumulated 34% less wealth than predicted based on previous generations, the St Louis Federal Reserve found. One reason? We started out with less.
The average salary of a newly-minted college graduate in 2008 was $46,000, according to the Bureau of Labor Statistics.  That was 8% less, adjusted for inflation, than college graduates aged 25 to 34 earned in 2002.
The homeownership rate of millennials between the ages of 25 and 34 was 37% in 2015 - 8% lower than that of prior generations, according to the Urban Institute. In the UK, the home-ownership rate for millennials has nearly halved.
There are plenty of explanations - not least fewer children, less wealth and coming of age after the housing market imploded. When we do manage to buy property, it's worth a lot less than the average first-homes of prior generations. The average median home value for someone aged 18-33 in 2013 was $133,000compared to $197,000 for the same age group in 2007.

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