{"id":25581,"date":"2021-06-01T02:24:00","date_gmt":"2021-06-01T02:24:00","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=25581"},"modified":"2021-06-03T13:19:43","modified_gmt":"2021-06-03T13:19:43","slug":"68-of-millennials-earn-more-than-their-parents-but-boomers-had-it-better","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/68-of-millennials-earn-more-than-their-parents-but-boomers-had-it-better\/","title":{"rendered":"68% of millennials earn more than their parents, but boomers had it better"},"content":{"rendered":"\n

Peter Siminski<\/a>, University of Technology Sydney<\/a><\/em><\/p>\n\n\n\n

A lot of us are pessimistic about our children\u2019s future. According to the most recent data from the Pew Global Attitudes Survey (in 2019), just 29% of Australians believe today\u2019s children will be better off financially<\/a> than their parents.<\/p>\n\n\n\n

Such pessimism is common in many developed nations. In Japan, just 13% believe children will be better off, in France 16%, in Britain 22%. Australians are still marginally less optimistic than Canadians (30%) and Americans (31%), and significantly less optimistic than Swedes (40%) and Germans (48%).<\/p>\n\n\n\n

Our research shows<\/a> things aren\u2019t as bad as many fear, with 68% of millennials (those born between 1981 and 1987 for our research) earning more income than their parents did at the same age. This is close to the highest percentage among countries<\/a> for which estimates are available. The experience of gen-Xers (born from the early 1960s to late 1970s) has been similar.<\/p>\n\n\n\n

But it\u2019s not all good news. That percentage is lower than the upward mobility enjoyed by baby boomers (born from 1946 to the early 1960s). For those born around 1950, 84% earned more at age 30-34 than their own parents did at the same age.<\/p>\n\n\n\n

There are two prime reasons for this decline in absolute mobility since the 1980s. Lower economic growth leading to average incomes growing more slowly; and growing income inequality.<\/p>\n\n\n\n

How we did our research<\/h2>\n\n\n\n

The share of people whose income is higher than their parents at the same age is known as \u201cabsolute income mobility\u201d. It is an appealing indicator of economic progress because it captures aspirations for our children. It reflects economic growth, inequality and opportunity.<\/p>\n\n\n\n

Estimating absolute mobility, though, is quite hard. The data we need to measure it directly \u2013 information about what people earned at a particular age compared to their own parents \u2013 does not exist for Australia.<\/p>\n\n\n\n

To do this exercise, therefore, we\u2019ve applied new statistical methods<\/a> that have been developed in recent years to estimate absolute mobility without linked parent-child data. These methods, using separate generational data on income distribution, have been verified in research published in 2018<\/a> and in 2020<\/a>.<\/p>\n\n\n\n

Our own approach closely follows leading international studies. We used sources of data including the Melbourne Institute\u2019s Household, Income and Labour Dynamics in Australia (HILDA) survey, data from Australian Bureau of Statistics surveys and income tax records.<\/p>\n\n\n\n

What our research shows<\/h2>\n\n\n\n

The main results are below. Of people born in 1950, 84% had higher household incomes than their parents. This fell to about 68% for those born since the early 1960s. It has stayed roughly constant for gen-Xers and millennials.<\/p>\n\n\n\n

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