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March 6, 2014

William R. Emmons

Center for Household Financial Stability

Federal Reserve Bank of St. Louis

William.R.Emmons@stls.frb.org

These comments do not necessarily represent the views of the Federal

Reserve Bank of St. Louis or the Federal Reserve System.

Generations X and Y:

Facing Economic and Financial Challengesin the Shadow of the Baby Boom

1

conLowdownL ittle R ock

mailto:William.R.Emmons@stls.frb.orgmailto:William.R.Emmons@stls.frb.org

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Generations X and Y:Facing Economic and Financial Challenges

in the Shadow of the Baby Boom

Why generations matter for economic and financial

outcomes

Who are Generations X and Y?

Opportunities for Gen X and Gen Y

Labor markets: Youll benefit from scarce competition.

Asset markets: We need you to buy our houses and stocks.

Economic and financial challenges facing themembers of Gen X and Gen Y

Damage from the Great Recession

Can living standards keep rising?

Fiscal and environmental sustainability

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Why Generations Matter for Economic

and Financial Outcomes

Think of generations as cohorts (groups) that move

through their lives side-by-sideyour peer group.

New generations affect overall supply and demand.

A large supply of workers may push down wages; a large

number of savers may push down interest rates.

A large demand for education, employment, housing, or

social insurance will affect political choices.

Each generation is unique, shaped by social,cultural, and political experiences.

Historical episodes affect attitudes and behaviors.

Each generation will have its turn in charge of the

economy and the political process.

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Generations Since 1900

The Greatest Generation, born 1900-24

(included people who fought in WW II)

The Silent Generation, born 1925-45(Depression and WW II)

Baby Boomers, born 1946-64

Generation X, born 1965-80

Generation Y (also called Millennials

or Echo Boomers), born 1981-2000

The Post-Millennial Generation, born

after 2000

Currently

90-114 years old

69-89

50-68

34-49

14-33

Under 14

Big

winners

Big

losers

?

?

?

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Generations Since 1900:

How Big?

Millions of

people

Source: Census Bureau

Projections

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Millions of

people

Source: Census Bureau

Projections

Generations Since 1900:

How Big?

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Millions of

people

Source: Census Bureau

Projections

Generations Since 1900:

How Big?

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Millions of

people

Source: Census Bureau

Projections

Generations Since 1900:

How Big?

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Millions of

people

Source: Census Bureau

Projections

Generations Since 1900:

How Big?

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Millions of

people

Source: Census Bureau

Projections

Generations Since 1900:

How Big?

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Generations Since 1900: Adjusting

for Different Generation Lengths

Millions of

people

Source: Census Bureau

Projections

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Generations Since 1900: Adjusting

for Different Generation Lengths

Millions of

people

Source: Census Bureau

Projections

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Generations Since 1900: Adjusting

for Different Generation Lengths

Millions of

people

Source: Census Bureau

Projections

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Generations Since 1900: Adjusting

for Different Generation Lengths

Millions of

people

Source: Census Bureau

Projections

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Generations Since 1900: Adjusting

for Different Generation Lengths

Millions of

people

Source: Census Bureau

Projections

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Generations Since 1900: Adjusting

for Different Generation Lengths

Millions of

people

Source: Census Bureau

Projections

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Generations Since 1900: Adjusting for

Different Generation Lengths and

Growing Overall Population

Source: Census Bureau

ProjectionsPercent o f

overall

population

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Generations Since 1900: Adjusting for

Different Generation Lengths and

Growing Overall Population

Source: Census Bureau

ProjectionsPercent o f

overall

population

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Generations Since 1900: Adjusting for

Different Generation Lengths and

Growing Overall Population

Source: Census Bureau

ProjectionsPercent o f

overall

population

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Generations Since 1900: Adjusting for

Different Generation Lengths and

Growing Overall Population

Source: Census Bureau

ProjectionsPercent o f

overall

population

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Generations Since 1900: Adjusting for

Different Generation Lengths and

Growing Overall Population

Source: Census Bureau

ProjectionsPercent o f

overall

population

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Generations Since 1900: Adjusting for

Different Generation Lengths and

Growing Overall Population

Source: Census Bureau

ProjectionsPercent o f

overall

population

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Life-Cycle Stages: Which Generation

Had the Largest School-Age Population?

Source: Census Bureau

Percent o f

overall

population

Age of the f irst year s members of the generat ion

First year of

cohort: 1900

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Life-Cycle Stages: Which Generation

Had the Largest School-Age Population?

Source: Census Bureau

Percent o f

overall

populationFirst year of

cohort: 1900

1925

Age of the f irst year s members of the generat ion

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Life-Cycle Stages: Which Generation

Had the Largest School-Age Population?

Source: Census Bureau

Percent o f

overall

populationFirst year of

cohort: 1900

1925

1946

Age of the f irst year s members of the generat ion

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Life-Cycle Stages: Which Generation

Had the Largest School-Age Population?

Source: Census Bureau

Percent o f

overall

populationFirst year of

cohort: 1900

1925

1946

1965

Age of the f irst year s members of the generat ion

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Life-Cycle Stages: Which Generation

Had the Largest School-Age Population?

Source: Census Bureau

Percent o f

overall

populationFirst year of

cohort: 1900

1925

1946

1965

1981

Age of the f irst year s members of the generat ion

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Life-Cycle Stages: Which Generation

Had the Largest School-Age Population?

Source: Census Bureau

Percent o f

overall

populationFirst year of

cohort: 1900

1925

1946

1965

1981

2001

Age of the f irst year s members of the generat ion

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Life-Cycle Stages: Which Generation Had

the Largest Working-Age Population?

Source: Census Bureau

Percent o f

overall

population

Age of the f irst year s members of the generat ion

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Generations X and Y and Post-

Millennials Will Be in Scarce Supply

Source: Census Bureau

Percent o f

overall

population

Age of the f irst year s members of the generat ion

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Supply and Demand in the

Labor Market

Price =

wage rate

Quantity =

hours worked

Supply of workers

Demand for workers

W

H

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