How Gen Alpha and Beta will drive new family norms
Download the full What The Future: Family issueThe dramatic rise in living alone and rejecting traditional marriage is redefining family, with big implications for society and business. Historical demographer Steven Ruggles, regents professor at the University of Minnesota, has studied changing family structures for decades and built the world’s largest public database of population statistics called IPUMS. Despite challenges for recent generations, he is optimistic for Gen Alpha and Gen Beta, seeing potential in demographic changes shaping their futures.
Kate MacArthur: Recent Census data shows a big drop in family-classified households in 2024 (64%) from 50 years ago (79%). What happened?
Steven Ruggles: All that means is there's a rise of one-person households. It has accelerated in the last 30 or 40 years. It continues to accelerate because the kids are not only not getting married, they're also not cohabiting. Then there are a lot of old people because the Baby Boomers are getting old, and old people are more likely to live alone if they're widowed or divorced.
MacArthur: What is driving this decline?
Ruggles: The leading hypothesis for this initially came from economist Richard Easterlin, who argued that it was due to relative cohort size. He argued that people make marriage decisions based on their circumstances compared to the circumstances they knew growing up. If it's a lot worse, they don't think they have enough wherewithal to start a family and get married. You had these Baby Boomers hitting the job market, and it became difficult to get a job. The peak wages were in 1973, so throughout the rest of the ’70s and ’80s, wages were declining for young people. Easterlin predicted marriage would bounce back in the ’80s because the cohorts entering the job market were smaller. That didn’t happen. Incomes for young people kept going down until 2015. I argue that this is because the Baby Boomers were clogging up the system.
MacArthur: What does that mean for the future?
Ruggles: We are on the verge of an enormous change where because of the retirement of the Baby Boomers and the decline of fertility 20 years ago, the number of people entering the labor force is about to fall off a cliff. Plus, add in the decline of immigration and of immigrant labor lately, and that's going to compound it. In the last decade there has been an uptick in the wages of young people, and it's quite possible that pretty soon they might get higher than they were in 1973.
MacArthur: How do marital rates shape society, how we build laws and how we understand business?
Ruggles: That obviously has implications for the housing market and stuff like that. I imagine it's got a lot of implications for how people spend their time. Divorce is finally going down. It is particularly marked among young people. The reason why is because the ones who would've been most likely to divorce don't get married in the first place.
MacArthur: What about birth rates, whether they're happening in marriage or in partnerships or not?
Ruggles: It's obviously got implications for old age support. By 2040, there's going to be a huge shortfall of incoming workers, and the final retirement or die-off of the Baby Boomers will have occurred by then. I would anticipate that there will be lots of incentives for people to mechanize production. There’ll be a lot of pressure to open immigration.
Because of the retirement of the Baby Boomers and the decline of fertility 20 years ago, the number of people entering the labor force is about to fall off a cliff.”
MacArthur: How does that shape society and the needs of society?
Ruggles: The fertility decline is a worldwide phenomenon, and the pronatalist policies that have been adopted in other countries have had limited to zero impact. I'm not sure that it's a problem in the long run. It does mean that young people will be in short supply, and they're going to get paid more. You'll probably see a reduction in generational inequality. It could be that if the economic circumstances of young people improve, maybe they'll get married more or otherwise partner more. But there are a lot of pluses to having small birth cohorts. Colleges are wanting to recruit you, and everything is easier when you're in a small cohort compared to what came before.
MacArthur: How could things get better for incoming generations, like Gen Alpha and Gen Beta?
Ruggles: The 10- to 19-year-olds probably will be in better shape than we were. But the real beneficiaries are the really little kids now. When they hit the job market, it is going to be super good for them.
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