New Generation, New Values: The Decline of Marriage in America

Every generation has a different set of values from the one before it. The “Greatest Generation” survived the Great Depression and World War II, developing a much different set of values than, say, Generation X or Y, whose conflicts tend to be focused on family, friends, and their immediate surroundings.

My wife and I married at 23, which sounds crazy now. I was obviously young, not far out of college, between undergrad and grad school, and already had student loans.

Living in New York, my idea of financial responsibility was keeping the credit card charges under the limit while spending everything I had on rent and entertainment. To say that we weren’t yet on a firm financial footing would be an understatement.

It didn’t matter, we married anyway. Our first child was born when I was 26 and still in grad school.

Those circumstances — young, educated, in debt, not yet financially stable, back in school, and married with children — didn’t seem unusual at the time, although they would clearly make me an outlier today.

Nowadays, the news is full of stories of young millennials putting off life decisions as they grapple with finding good jobs, paying off student loans, and generally getting settled. One indication of this is the falling marriage rate, which has long been considered the starting point for so many other milestones in life.

But maybe times are changing.

Looking back farther than just the last five years, marriage has been on the wane for decades. We tend to think of marriage as a precursor to other highlights in life, like having children and buying a home. However, while marriage rates have dropped, these other milestones have ebbed and flowed, not necessarily following the path of nuptials.

In other words, just because marriage is waning doesn’t mean that people have stopped having kids or buying houses, which are both drivers of the economy!

Over the past fifty or so years, the total fertility rate (TFR, or the number of children per woman of child-bearing age) has been anything but consistent. Births in the U.S. fell in the early 1970s, and bottomed around 1976. At this point the fertility rate had fallen to 1.9, well below the 2.10 rate needed to keep the size of the population stable.

The birth rate moved higher by the mid-1980s, experienced a brief drop during the 2001 recession, peaked in 2007, then fell with the onset of the financial crisis, eventually dipping to 1.88 by 2013.

According to the C.I.A. Factbook, the estimated fertility rate in the U.S. last year was 2.01; not quite replacement rate, but definitely moving in the right direction. From our point of view, the economy needs the children to coax spending by the parents, to say nothing of supporting all of us through Social Security and Medicare taxes later on.

The interesting part is that while child birth is turning the corner, so far marriage is not.

A possible reason for this is that more children are born to unwed mothers. That’s true, but with a twist.

The rising trend is for cohabitating couples to have children. When including this category and comparing 2002 with the combined years of 2011 through 2013, single-parent births dropped from 21.3% to 18.0%, married-parent births dropped from 64.4% to 56.43%, and cohabitating-parent births shot up from 14.3% to 25.9%, almost double.

Many cohabitating couples with children cite their uncertain financial future as a main reason for not yet tying the knot, so the economy is still holding people back from some decisions. How these same people think having children is somehow cheaper or less of a burden than marriage, I have no idea.

But the point remains that even though these couples are reaching life’s milestones in a different order, they are still reaching them. This includes the desire to buy a home.

According to Zillow, 5.2 million renters say they intend to buy a home this year, which is one million more than at the same time last year. As rents get more expensive and children crowd the apartment, it’s easy to see why housing demand could pick up, especially for starter homes.

The downturn we expect in the near future will dampen some of these trends — probably causing births to fall again for a couple of years and many renters to stay put at the same time — but the great thing about people is they will eventually find ways to go about their lives and reach their goals.

As they do, I believe the large millennial generation will give our economy the horsepower it needs to finally break out of the current deflationary cycle and drive to new heights.

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Rodney

Harry Dent’s Most Disturbing Prediction in Years

Harry Dent, one of the most respected economists in the industry, has uncovered a disturbing market event that could soon devastate millions of investors. In short, he has undeniable proof that one of the market’s safest and most popular investments is about to get slaughtered… and it will have dire consequences for those who don’t prepare right away.

For full details on the event Harry’s dubbed as the “Safe-Asset Slaughter”… and to ensure you escape the coming carnage, I urge you to watch this special presentation.

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Categories: Life Cycle

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.