I recently came across a fascinating study called “The Changing Economics and Demographics of Young Adulthood: 1975-2016”. It was put together by the US Census Bureau and the US Department of Commerce. It defines young adults as 18 to 34 year olds, what we call “millennials” today, and compares them to the same age group back in the 1970s. Some of the findings are stark:
• Education not family marks the transition to adulthood. Most Americans say that getting married or having a child are not important in becoming an adult. Instead the most important milestone is finishing school, following by attaining economic security (eg getting a full-time job)
• Marrying later. Looking at family more closely, the chances of a woman in her early 20s being married has collapsed from 60% in the 1970s to 15% today. However amongst the same age group the chances of having a child has fallen only from 30% to 25%. This suggests that parenthood precedes marriage for many women. Interestingly by the age of 40 around 85% of women are married which is similar to the 1970s.
• Living together before marrying. While marriage is being delayed, the age when people start their first co-residential relationship has remained around 22 years old over the decades, whereas the age they first marry has risen to 27 (for women).
• Living with parents much more common today. In the 1970s, the common living arrangement was to live with a spouse (57%). Today it is to live with one’s parents (27%). Part of the reason for living with parents is the cost of housing or job insecurity but a significant factor is a disability that requires parental support
• Better educated today, especially women. Looking at the 24- to 34-year old segment of young adults, they are better educated than in the 1970s. Over one-third have a college degree or higher compared with less than quarter in 1975. Young women have experienced the biggest changes in this regard. Today more young women have college degrees than men unlike the 1970s.
• More young women working today. On the job front, more young adults have jobs than the 1970s, but this is entirely due to the participation of women in the labour force. The share of young women employed has risen from 50% in 1975 to 70% today. The share of men employed has stayed the same.
• Women’s earnings have increased. In terms of earnings, the median income of 25- to 34-year old women has risen by over 26% in real terms from $23K in 1975 to $29K (in 2015 dollar terms). Men still earn 35% more than women, but it was much worse in the 1970s, when men earned double what women earned.
• Young men dominate the bottom of the income distribution. Men’s average real income has fallen 15% since the 1970s. Not only that, but this average masks the fact that the distribution of young men’s earnings has changed dramatically with over 40% having an income of less than $30K compared to 25% in 1975. The share of men earning over $100K has grown from 3% to 8%. Therefore, the share of men in the middle range of income has collapsed since the 1970s.
Take a read of the full report, there’s a lot more to digest!