I’ve been struck by the revival of interest in generational analysis in recent years, particularly analysis of Generation Y (Millennials) and now Generation Z (the subject of our most recent trends breakfast).
This has not always been the case. There was a flurry of interest in the mid-1990s (after the publication of Douglas Coupland’s book Generation X: Tales for an Accelerated Culture in 1991), but generational analysis largely disappeared from the UK trends and forecasting radar after that. It reappeared following the financial crisis of 2008 amidst concern of the impact it would have on Millennials. This was not true of the United States, which has had a more sustained interest in the origin of generation labels and definitions.
Of course, generational analysis is an important tool for researchers. An individual’s age is one of the most common predictors of differences in attitudes and behaviours because it signifies two important characteristics: our place in the life cycle and our membership in a cohort of individuals who were born at a similar time. Classically schooled researchers think of three possible age-based effects:
- Life cycle effects, when differences between younger and older people are largely due to their respective positions in the life cycle
- Period effects, when events and circumstances (for instance, wars, economic booms or busts, or technological breakthroughs) simultaneously impact everyone, regardless of age
- Cohort effects when differences between generations are the by-product of the unique historical circumstances that members of an age cohort experience, particularly during a time when they are in the process of forming opinions (and, as they age, this is an experience that the subsequent generations did not share)
But there are limits to generational analysis.
People are not completely defined by their age and generation. Understanding the different experiences of people within the same age cohort is incredibly important. This was highlighted by some recent analysis from the Resolution Foundation on changes in home ownership since 2003.
Their data show that home ownership in England peaked at 71% in 2003 and fell back to 63% by 2014. Millennial households are facing particular difficulties in accessing home ownership; 48% of households in the 25-34 age group currently live in the private rented sector compared to 21% in 2003. Over the same period owner occupation in this age group fell from 59% to 36%. The ONS has separately reported that there are 3.4 million Millennials still living with their parents.
So what are we to make of there being a unifying Millennial experience in the UK today based on these figures?
Household tenure is one of the most fundamental determinants of our spending patterns and lifestyles as consumers. Yet we see significant groups of Millennials differentially living with parents, renting privately and as owner occupiers. The latter group will be in the market for DIY, TVs and home furnishings. The others will not. The former group will be in the market for out of home leisure (to escape the parental home) in a way the others will not. We also know the private renter group who spend the biggest proportion of their incomes on housing costs, leaving less disposable income for other things.
Home ownership has been falling despite the fact that it remains the tenure of choice for the majority of Millennials. Several recent surveys have found, given a free choice, that around 80% of Millennials would prefer to buy their own home rather than rent. Little more than a third have had the satisfaction of achieving this aspiration, whilst the majority feel the frustration of being locked out of the market. At a time when it is common to focus on inter-generation divides, we must not forget the intra-generational ones.