Here’s Why Millennials Aren’t That Different
Much as I hate to mention the “M” word—millennials—because so much has been said about them that is not true, the Washington Post recently published an interesting and useful summary of data about them.
The summary describes what we know about their experiences, particularly as opposed to those who were the same age decades earlier. But here’s the thing: Stories about how millennials are different than people who are in their 50s now tell us nothing useful, because they confuse “age effects” (the fact that people of different ages act differently because of where they are in the course of life) with “cohort effects,” which is the claim that this “generation” is somehow different than people of this age were decades ago.
Commentators can’t seem to agree on who this age group is, and frankly, I would have thought if you are going to call them “millennials,” they should have something to do with the millennium. But the description here is of the age group born from 1981 to 1996, a pretty arbitrary range it seems to me, especially because a “generation” is usually a 25-year period.
Anyway, the summary describes what they are doing, and you’ll see the common themes in a minute.
The first point is that fewer of those in this age group are married than previous age cohorts were at this point. The trend toward later marriages has been going on for some time, though. The Pew Foundation reports that, while the average age of first marriages in 1960 was 20 and 23 for women and men, respectively, it is now 27 and 29.
The average age at which they have children is also up, by about seven years as compared to baby boomers. The one most important to realtors is that they are about six years older than baby boomers before they own a home. About 20 percent of that difference appears due to the fact that this cohort owes more in student loans than did the baby boomers. Some of the student-loan difference is because they also are more likely to have attended college and gotten a college degree at this point in their life than any group before them: 36 percent of women have a college degree versus 28 percent of baby boomers, while the figure for men is 29 percent versus 24 percent.
The linking theme in the above figures comes about from one more difference: This group has had less income growth in their career than prior cohorts. Many of them graduated into the teeth of the Great Recession, the worst job market in modern times whose effects still linger. We know that lower incomes cause people to delay getting married and having children. Recent studies asking young adults why they have not had children turn almost entirely on the lack of financial resources. Not surprisingly, income constraints delay home ownership as well.
Here’s one other result worth keeping in mind, though: Most of the differences, on average, for this age group are driven by those who did not go on to college. Compared to prior generations for individuals without a college degree, many in this age category delay or sidestep getting married, having children or buying a home. Not surprisingly, that appears to be because of the especially depressed labor market for those individuals.
One point about these differences is that they are true only about the cohort on average. They aren’t attributes of each individual member in it. In fact, they aren’t even especially common among the college graduates because they appear driven by non-college grads. It just isn’t the case that, for example, each millennial has six months more college education than a baby boomer.
The more important point is that these differences are things that have happened to millennials, largely because of the Great Recession. Nothing about them as individuals caused them to earn less than previous generations did at this point in their lives, for example, which appears to be the driving factor in these other results.