Latest Developments in the Canadian Economic Accounts
Inter-generational comparisons of household economic well-being

Summary

This study of data from the Distributions of Household Economic Accounts compares households’ economic well-being from a macro-economic accounts perspective, as measured by net saving and net worth for each generation when the major income earner for a household in one generation reached the same point in the life cycle as the major income earner for a household in another generation. The study finds that while younger generations have higher disposable income and higher consumption expenditure than older generations when they reached the same age, their net saving is relatively similar. As well, younger generations’ economic well-being may be more at risk due to the COVID-19 pandemic since they depend more on employment as a primary source of income, they have higher debt relative to income, and they have less equity in financial and real estate assets from which to draw upon when needed.

Acknowledgements

This paper was prepared by James Gauthier of the National Economic Accounts Division, Statistics Canada.

This work would not have been possible without the invaluable contributions of Amanda Sinclair, Jackie Maisonneuve, Habib Saani, Matthew Hoffarth, Dave Krochmalnek and Brenda Bugge, as well as support from Monique Deschambault, Rob Puchyr, Jennifer Withington and Catherine Van Rompaey.

Introduction

According to the life-cycle hypothesis, households spend and save over their lifetimes based on their expectations of future income and, consequently, their ability to generate wealth (Szenberg, 2008). Chart 1 illustrates that as a major income earner in a household transitions through early adulthood, they increase their consumption and debt holdings, assuming that future gains in their income and wealth will accommodate such spending. During middle age, households save to maintain their expected future consumption as they transition to retirement and draw from their accumulated wealth (Pew Research Center, 2015, and Pettinger, 2019).

Data table for Chart 1A



Data table for Chart 1A
Table summary
This table displays the results of Data table for Chart 1A. The information is grouped by Lifetime age (appearing as row headers), Income and Consumption, calculated using dollars units of measure (appearing as column headers).

Lifetime age	Income	Consumption
	dollars
1	8,469	72,827
2	11,213	73,040
3	14,079	73,253
4	17,065	73,467
5	20,169	73,680
6	23,388	73,893
7	26,718	74,107
8	30,154	74,320
9	33,692	74,533
10	37,324	74,746
11	41,044	74,960
12	44,843	75,173
13	48,714	75,386
14	52,645	75,600
15	56,627	75,813
16	60,649	76,026
17	64,698	76,240
18	68,762	76,453
19	72,827	76,666
20	76,879	76,879
21	80,905	77,093
22	84,889	77,308
23	88,817	77,523
24	92,672	77,739
25	96,440	77,955
26	100,105	78,172
27	103,651	78,389
28	107,063	78,607
29	110,326	78,826
30	113,426	79,045
31	116,348	79,265
32	119,079	79,486
33	121,605	79,707
34	123,916	79,929
35	125,999	80,151
36	127,846	80,374
37	129,445	80,598
38	130,791	80,822
39	131,875	81,047
40	132,694	81,272
41	133,241	81,498
42	133,516	81,725
43	133,516	81,952
44	133,241	82,180
45	132,694	82,409
46	131,875	82,638
47	130,791	82,868
48	129,501	83,099
49	127,902	83,330
50	126,055	83,562
51	123,972	83,794
52	121,661	84,027
53	119,135	84,261
54	116,404	84,496
55	113,482	84,731
56	110,382	84,966
57	107,119	85,203
58	103,707	85,440
59	100,161	85,678
60	96,496	85,916
61	92,728	86,155
62	88,873	86,395
63	84,945	86,635
64	80,961	86,876
65	76,935	87,118
66	72,883	87,360
67	68,818	87,603
68	64,754	87,847
69	60,705	88,091
70	56,683	88,336
71	52,701	88,582
72	48,770	88,829
73	44,899	89,076
74	41,100	89,324
75	37,380	89,572
76	33,748	89,821
77	30,210	90,071
78	26,774	90,322
79	23,444	90,573
80	21,000	90,825
81	17,800	91,078
82	15,300	91,331
83	12,600	91,585
84	10,000	91,840
Source: Author's illustrations based on Tejvan Pettinger, Life-Cycle Hypothesis, May 24, 2019.

Data table for Chart 1B



Data table for Chart 1B
Table summary
This table displays the results of Data table for Chart 1B. The information is grouped by Lifetime age (appearing as row headers), Income, Consumption and Wealth, calculated using dollars units of measure (appearing as column headers).

Lifetime age	Income	Consumption	Wealth
	dollars
20	76,879	76,879	10,000
21	80,905	77,093	28,372
22	84,889	77,308	46,744
23	88,817	77,523	65,116
24	92,672	77,739	83,488
25	96,440	77,955	101,860
26	100,105	78,172	120,233
27	103,651	78,389	138,605
28	107,063	78,607	156,977
29	110,326	78,826	175,349
30	113,426	79,045	193,721
31	116,348	79,265	212,093
32	119,079	79,486	230,465
33	121,605	79,707	248,837
34	123,916	79,929	267,209
35	125,999	80,151	285,581
36	127,846	80,374	303,953
37	129,445	80,598	322,326
38	130,791	80,822	340,698
39	131,875	81,047	359,070
40	132,694	81,272	377,442
41	133,241	81,498	395,814
42	133,516	81,725	414,186
43	133,516	81,952	432,558
44	133,241	82,180	450,930
45	132,694	82,409	469,302
46	131,875	82,638	487,674
47	130,791	82,868	506,047
48	129,501	83,099	524,419
49	127,902	83,330	542,791
50	126,055	83,562	561,163
51	123,972	83,794	579,535
52	121,661	84,027	597,907
53	119,135	84,261	616,279
54	116,404	84,496	634,651
55	113,482	84,731	653,023
56	110,382	84,966	671,395
57	107,119	85,203	689,767
58	103,707	85,440	708,140
59	100,161	85,678	726,512
60	96,496	85,916	744,884
61	92,728	86,155	763,256
62	88,873	86,395	781,628
63	84,945	86,635	800,000
64	80,961	86,876	762,857
65	76,935	87,118	725,714
66	72,883	87,360	688,571
67	68,818	87,603	651,429
68	64,754	87,847	614,286
69	60,705	88,091	577,143
70	56,683	88,336	540,000
71	52,701	88,582	502,857
72	48,770	88,829	465,714
73	44,899	89,076	428,571
74	41,100	89,324	391,429
75	37,380	89,572	354,286
76	33,748	89,821	317,143
77	30,210	90,071	280,000
78	26,774	90,322	242,857
79	23,444	90,573	205,714
80	21,000	90,825	168,571
81	17,800	91,078	131,429
82	15,300	91,331	94,286
83	12,600	91,585	57,143
84	10,000	91,840	20,000
Source: Author's illustrations based on Tejvan Pettinger, Life-Cycle Hypothesis, May 24, 2019.

The Distributions of Household Economic Accounts (DHEA) include annual estimates by generation of disposable income and consumption expenditure from 1999 to 2019, and of wealth from 2010 to 2019.^Note  These estimates allow for inter-generational comparisons of households’ economic well-being from a macro-economic perspective, as measured by net saving. Net saving represents the excess funds a household has to increase its net worth. Net worth, or wealth, represents the sum total of a household’s assets less its liabilities.

The illustration in chart 2 provides an overview of how the Canadian population has evolved by generation cohort over time from 1926 to 2019, and how the life experiences of households may have been affected by variations in their disposable income during those periods. Over time, real household disposable income per capita has varied along with fluctuations in economic activity, the onset and resolution of global conflicts, as well as the introduction of, and later modifications to government-sponsored social assistance, education, universal health care and old age security.

Data table for Chart 2



Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2. The information is grouped by Generation (appearing as row headers), Birth year, Pre-1946, Baby boom, Generation X, Millennials, and later and Real HDI per capita, calculated using thousands of persons and year-over-year % change units of measure (appearing as column headers).

Generation	Birth year	Pre-1946	Baby boom	Generation X	Millennials, and later	Real HDI per capita
		thousands of persons				year-over-year % change
Pre-1946	1926	9,583	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
	1927	9,742	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4.5
	1928	9,901	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	5.4
	1929	10,060	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-1.9
	1930	10,219	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-6.7
	1931	10,377	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-8.9
	1932	10,490	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-10.3
	1933	10,603	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-3.5
	1934	10,716	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	9.6
	1935	10,829	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4.1
	1936	10,942	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	3.2
	1937	11,055	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	7.5
	1938	11,168	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	0.4
	1939	11,281	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4.6
	1940	11,394	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	8.7
	1941	11,507	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	8.2
	1942	11,757	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	18.3
	1943	12,007	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	2.8
	1944	12,257	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	6.8
	1945	12,507	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	1.6
Baby boon	1946	12,557	200	Note ...: not applicable	Note ...: not applicable	3.0
	1947	12,507	500	Note ...: not applicable	Note ...: not applicable	0.4
	1948	12,457	800	Note ...: not applicable	Note ...: not applicable	-0.8
	1949	12,407	1,100	Note ...: not applicable	Note ...: not applicable	-1.2
	1950	12,357	1,400	Note ...: not applicable	Note ...: not applicable	2.7
	1951	12,287	1,722	Note ...: not applicable	Note ...: not applicable	3.1
	1952	12,290	2,133	Note ...: not applicable	Note ...: not applicable	3.0
	1953	12,290	2,547	Note ...: not applicable	Note ...: not applicable	3.3
	1954	12,290	2,961	Note ...: not applicable	Note ...: not applicable	-2.9
	1955	12,290	3,375	Note ...: not applicable	Note ...: not applicable	5.4
	1956	12,290	3,791	Note ...: not applicable	Note ...: not applicable	6.1
	1957	12,200	4,312	Note ...: not applicable	Note ...: not applicable	-0.4
	1958	12,150	4,793	Note ...: not applicable	Note ...: not applicable	1.6
	1959	12,100	5,274	Note ...: not applicable	Note ...: not applicable	1.6
	1960	12,080	5,725	Note ...: not applicable	Note ...: not applicable	0.9
	1961	12,046	6,192	Note ...: not applicable	Note ...: not applicable	-1.4
	1962	11,900	6,693	Note ...: not applicable	Note ...: not applicable	5.7
	1963	11,800	7,148	Note ...: not applicable	Note ...: not applicable	3.2
	1964	11,700	7,603	Note ...: not applicable	Note ...: not applicable	2.9
	1965	11,600	7,908	150	Note ...: not applicable	5.4
Generation X	1966	11,285	8,430	300	Note ...: not applicable	3.8
	1967	11,500	8,376	450	Note ...: not applicable	2.6
	1968	11,400	8,537	700	Note ...: not applicable	2.7
	1969	11,300	8,648	1,000	Note ...: not applicable	2.2
	1970	11,200	8,659	1,400	Note ...: not applicable	1.8
	1971	11,388	8,738	1,836	Note ...: not applicable	3.7
	1972	11,000	8,738	2,480	Note ...: not applicable	7.8
	1973	10,700	8,738	3,054	Note ...: not applicable	7.3
	1974	10,700	8,710	3,398	Note ...: not applicable	4.8
	1975	10,700	8,943	3,500	Note ...: not applicable	4.7
	1976	10,785	8,996	3,669	Note ...: not applicable	4.1
	1977	10,800	9,076	3,850	Note ...: not applicable	0.9
	1978	10,800	9,076	4,087	Note ...: not applicable	2.5
	1979	10,800	9,076	4,326	Note ...: not applicable	2.2
	1980	10,800	9,076	4,640	Note ...: not applicable	1.6
Millennials, and later	1981	10,800	9,076	4,640	304	2.5
	1982	10,700	9,076	4,640	701	-2.0
	1983	10,650	9,076	4,640	1,001	-1.2
	1984	10,300	9,076	4,640	1,591	2.9
	1985	9,809	9,076	4,800	2,157	4.2
	1986	9,274	9,170	5,000	2,657	0.6
	1987	9,274	9,170	5,000	3,003	0.8
	1988	8,900	9,250	5,400	3,242	3.4
	1989	8,650	9,350	5,650	3,627	2.1
	1990	8,354	9,459	5,934	3,944	-2.1
	1991	8,200	9,480	5,980	4,377	-3.0
	1992	8,000	9,500	6,000	4,871	0.5
	1993	7,800	9,520	6,070	5,295	0.3
	1994	7,600	9,540	6,120	5,741	0.7
	1995	7,482	9,567	6,170	6,083	-0.8
	1996	7,300	9,580	6,200	6,530	-0.4
	1997	7,100	9,590	6,250	6,966	1.3
	1998	6,900	9,610	6,300	7,345	2.9
	1999	6,700	9,630	6,350	7,721	2.7
	2000	6,532	9,650	6,396	8,108	2.4
	2001	6,350	9,670	6,450	8,551	2.4
	2002	6,200	9,680	6,500	8,980	1.0
	2003	6,050	9,690	6,570	9,334	-0.5
	2004	5,900	9,700	6,620	9,721	2.0
	2005	5,745	9,711	6,680	10,108	0.6
	2006	5,560	9,700	6,750	10,561	4.3
	2007	5,400	9,695	6,800	10,994	2.2
	2008	5,200	9,690	6,850	11,507	2.2
	2009	5,000	9,686	6,900	12,043	1.2
	2010	4,804	9,682	6,969	12,550	1.9
	2011	4,600	9,660	7,000	13,079	-0.3
	2012	4,400	9,630	7,050	13,634	1.3
	2013	4,200	9,600	7,100	14,183	2.4
	2014	4,000	9,570	7,130	14,737	0.3
	2015	3,819	9,544	7,167	15,172	2.7
	2016	3,500	9,450	7,230	15,929	-0.4
	2017	3,200	9,330	7,260	16,755	Note ...: not applicable
	2018	2,900	9,200	7,290	17,675	Note ...: not applicable
	2019	2,790	9,070	7,324	18,409	Note ...: not applicable
Source: Author's calculations, based on data from Statistics Canada: Table A78-93, Population by age and sex, census dates, 1921 to 1971, catalogue 11-516-X; Table 17-10-0005-01, Population estimates on July 1st, by age and sex, 1971 to 2016; and Table 36-10-0229-01, Long-run provincial and territorial data, annual.

Households have different sources of income and varying consumption needs and preferences as they progress through the life cycle, including: early adulthood, when a major income earner completes his/her education and training and embarks on a career; middle age, when a career is established and some may choose to start a family and support the development of their children; and senior age, when a major income earner may transition to retirement and draw from a pension or receive social benefits.

Throughout the following analysis, unless otherwise specified, values for income, consumption, net saving and net worth are adjusted for inflation using the all-items Consumer Price Index. Adjusting these estimates for general price inflation in any given period allows for more direct comparisons of the state of household sector economic well-being across generations as they reached the same point in their life cycle (Heisz and Richards, 2019).

The estimates shown within the following analysis include the DHEA measure of average dollars per household. While DHEA estimates are available on both an average dollars per household basis as well as by average dollars per consumption unit, the latter of which controls not only for the number of households but also for differences in the number of persons and age composition within households (DHEA, 2020, and OECD, 2013), the observations presented in this paper are consistent using either measure. Other factors, not controlled for in the following analysis, include differences in business cycle effects, cohort effects, such as changes in educational attainment, and family dynamics, including the participation of women in the labour force, the incidence of two-earner families, etc. Unless otherwise specified, younger generations refer to households with a major income earner in the millennial generation (millennials) and generation X, while older generations refer to households with a major income earner in the baby boom generation (boomers) and the pre-1946 generation.

Younger generations have higher disposable income as well as higher consumption expenditure than older generations when they reached the same age

As illustrated in chart 3, a household may derive its disposable income from a number of sources, including from labour compensation such as wages and salaries, property income from receipts of interest and dividends, transfers from employer-sponsored pension plans, and from social benefits provided by governments and non-profit institutions serving households. In the DHEA, disposable income is presented net of all associated payments for taxes, interest paid and social contributions. Households may also receive mixed income from the operation of an unincorporated business, from direct rental income, and also from imputed rental income for owner-occupiers of dwellings.

Data table for Chart 3



Data table for Chart 3
Table summary
This table displays the results of Data table for Chart 3 Median age by generation, Median age 31, Median age 47, Median age 63 (baby boom), 68 (pre-1946), Millennials, Generation X, Baby boom and Pre-1946, calculated using 2019 dollars units of measure (appearing as column headers).

	Median age by generation
	Median age 31		Median age 47		Median age 63 (baby boom), 68 (pre-1946)
	Millennials	Generation X	Generation X	Baby boom	Baby boom	Pre-1946
	2019 dollars
Compensation of employees	90,047	76,139	118,608	94,106	58,340	62,615
Net mixed income	10,968	10,332	16,832	15,618	14,213	12,083
Net property income	2,960	2,359	7,630	7,894	14,300	9,313
Current transfers received	12,384	9,448	13,366	9,751	29,602	15,993
Less: current transfers paid	-36,170	-29,588	-53,971	-42,458	-35,180	-32,517
Source: Author’s calculations based on data from Statistics Canada, Distributions of Household Economic Accounts, and Table 18-10-0005-01, Consumer price index, annual average, not seasonally adjusted.

On an inflation-adjusted (2019) dollar basis, when millennial households’ major income earner reached a median age of 31 in 2019, their average disposable income was $80,200, higher than for generation X households’ who had $68,700 when they reached that same age in 2002. Most of the difference for millennial households is due to higher average labour compensation earned through wages and salaries.

Similarly, when generation X households reached a median age of 47 in 2019, their income was $102,500, compared to $84,900 for boomer households who reached that same age in 2003. Generation X also had higher labour compensation, mainly through wages and salaries, than boomers earned at that same age.

Although a direct comparison of income between the pre-1946 generation and boomer households cannot be made, as the median ages of the major income earner do not intersect for the years available, the overall trend for boomers suggests that when they do reach their late sixties it is likely that their disposable income will be higher than what the pre-1946 generation had at that age. When boomers reached the age of 63 in 2019, their household disposable income was about $81,300 compared with the pre-1946 generation who had $67,500 when they reached the age of 68 in 1999. Boomers earned more than the pre-1946 generation from mixed income (including self-employment, actual and imputed rent) and from net property (investment) income. As well, boomers received higher transfer income, including old age security and employer-sponsored pension benefits.

Higher consumption expenditures for younger generations due mainly to housing and utility costs

Household consumption expenditure consists mainly of cash outlays for consumer goods and services, but it also includes imputed expenditures related to owner‑occupied rent. Similar to income, chart 4 shows that each successive generation spent more than the preceding generation, in inflation-adjusted terms, when they reached the same points in their life cycle. While younger generations spent more than older generations on most types of consumption expenditures, these increases were driven mainly by housing and utility costs – including paid and imputed rental fees, maintenance and repair costs, as well as water, electricity, gas and other fuel costs. Regardless of generation, housing and utility costs accounted for about a quarter of overall household spending. Other key expenditure items that increased for each successive generation include transport, food, beverage and accommodation services, as well as insurance and financial services.

Data table for Chart 4



Data table for Chart 4
Table summary
This table displays the results of Data table for Chart 4 Median age by generation, Median age 31, Median age 47, Median age
63 (baby boom),
68 (pre-1946), Millennials, Generation X, Baby boom and Pre-1946, calculated using 2019 dollars units of measure (appearing as column headers).

	Median age by generation
	Median age 31		Median age 47		Median age 63 (baby boom), 68 (pre-1946)
	Millennials	Generation X	Generation X	Baby boom	Baby boom	Pre-1946
	2019 dollars
Housing, water, electricity, gas and other fuels	18,428	13,970	23,111	18,599	20,847	15,747
Transport	14,176	10,905	16,558	13,519	12,591	10,116
Food and non-alcoholic beverages	7,064	6,676	8,852	7,926	7,650	6,656
Food, beverage and accommodation services	6,785	5,765	7,583	6,266	5,894	5,000
Recreation and culture	6,253	6,766	8,556	9,020	6,720	6,701
Insurance and financial services	5,426	5,106	8,288	7,534	9,502	5,858
Other, not elsewhere classified	22,057	19,500	29,518	22,047	18,070	17,411
Source: Author’s calculations based on data from Statistics Canada, Distributions of Household Economic Accounts, and Table 18-10-0005-01, Consumer price index, annual average, not seasonally adjusted.

Evolution of net saving similar by generation

To derive household net saving, in addition to factoring in household disposable income and consumption expenditure, an adjustment is applied in the DHEA estimates to include the change in employer-sponsored pension entitlements. The change in pension entitlements accounts for additions or subtractions to a household’s saving, depending on whether employee contributions and investment income outweigh pension withdrawals. In the context of the macro-economic accounts, since a net increase in the value of pension entitlements increases a household’s equity in pension funds, it is considered as an addition to their saving, which can be accessed by a household in retirement.

Net saving for younger generations has evolved in similar ways over time. As shown in chart 5, net saving was positive for both millennials ($8,300) and generation X ($4,800) households when the major income earner reached a median age of 31. Although millennials had higher disposable income than generation X, they also had higher consumption expenditure. Over the entire 1999-2019 period, net saving generally increased for both millennials and generation X households as they continue to work and contribute to their pensions.

Data table for Chart 5



Data table for Chart 5
Table summary
This table displays the results of Data table for Chart 5. The information is grouped by Median age (appearing as row headers), Value per household, Disposable income, Household final consumption expenditure, Net saving, Pre-1946, Baby boom, Generation X and Millennials, calculated using 2019 dollars units of measure (appearing as column headers).

Median age	Value per household
	Disposable income				Household final consumption expenditure				Net saving
	Pre-1946	Baby boom	Generation X	Millennials	Pre-1946	Baby boom	Generation X	Millennials	Pre-1946	Baby boom	Generation X	Millennials
	2019 dollars
18	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	22,615	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	27,753	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-3,741
19	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	31,225	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	31,052	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	771
20	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	33,525	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	31,895	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	2,810
21	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	37,861	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	39,370	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-263
22	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	39,771	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	44,595	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-3,254
23	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	46,214	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	49,844	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-838
24	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	50,041	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	54,834	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-1,883
25	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	57,141	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	56,720	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,690
26	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	60,757	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	61,251	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,166
27	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	64,357	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	65,076	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,906
28	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	69,011	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	71,673	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	3,352
29	Note ...: not applicable	Note ...: not applicable	60,970	73,581	Note ...: not applicable	Note ...: not applicable	62,920	74,340	Note ...: not applicable	Note ...: not applicable	2,652	6,660
30	Note ...: not applicable	Note ...: not applicable	65,675	77,746	Note ...: not applicable	Note ...: not applicable	64,969	78,976	Note ...: not applicable	Note ...: not applicable	5,826	7,056
31	Note ...: not applicable	Note ...: not applicable	68,688	80,189	Note ...: not applicable	Note ...: not applicable	69,219	80,914	Note ...: not applicable	Note ...: not applicable	4,767	8,305
32	Note ...: not applicable	Note ...: not applicable	69,254	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	69,858	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	5,562	Note ...: not applicable
33	Note ...: not applicable	Note ...: not applicable	71,844	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	73,445	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	5,421	Note ...: not applicable
34	Note ...: not applicable	Note ...: not applicable	76,304	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	78,253	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	5,665	Note ...: not applicable
35	Note ...: not applicable	Note ...: not applicable	79,028	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	80,160	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	7,200	Note ...: not applicable
36	Note ...: not applicable	Note ...: not applicable	80,579	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	79,981	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	9,648	Note ...: not applicable
37	Note ...: not applicable	Note ...: not applicable	84,268	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	79,652	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	13,397	Note ...: not applicable
38	Note ...: not applicable	Note ...: not applicable	86,604	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	84,061	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	12,138	Note ...: not applicable
39	Note ...: not applicable	Note ...: not applicable	87,584	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	85,116	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	13,067	Note ...: not applicable
40	Note ...: not applicable	Note ...: not applicable	90,701	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	89,440	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	12,515	Note ...: not applicable
41	Note ...: not applicable	Note ...: not applicable	93,793	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	92,080	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	13,369	Note ...: not applicable
42	Note ...: not applicable	Note ...: not applicable	94,603	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	93,967	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	12,856	Note ...: not applicable
43	Note ...: not applicable	81,182	95,295	Note ...: not applicable	Note ...: not applicable	81,874	95,860	Note ...: not applicable	Note ...: not applicable	8,378	11,497	Note ...: not applicable
44	Note ...: not applicable	83,171	95,439	Note ...: not applicable	Note ...: not applicable	82,608	96,390	Note ...: not applicable	Note ...: not applicable	9,859	12,376	Note ...: not applicable
45	Note ...: not applicable	84,549	99,653	Note ...: not applicable	Note ...: not applicable	83,569	99,587	Note ...: not applicable	Note ...: not applicable	9,752	13,490	Note ...: not applicable
46	Note ...: not applicable	85,488	101,060	Note ...: not applicable	Note ...: not applicable	86,237	99,847	Note ...: not applicable	Note ...: not applicable	7,657	14,794	Note ...: not applicable
47	Note ...: not applicable	84,911	102,466	Note ...: not applicable	Note ...: not applicable	86,729	100,107	Note ...: not applicable	Note ...: not applicable	6,901	16,098	Note ...: not applicable
48	Note ...: not applicable	87,543	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	90,626	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	6,045	Note ...: not applicable	Note ...: not applicable
49	Note ...: not applicable	87,215	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	90,938	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	5,537	Note ...: not applicable	Note ...: not applicable
50	Note ...: not applicable	88,620	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	90,667	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	6,981	Note ...: not applicable	Note ...: not applicable
51	Note ...: not applicable	89,954	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	92,594	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	6,477	Note ...: not applicable	Note ...: not applicable
52	Note ...: not applicable	90,890	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	93,426	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	5,751	Note ...: not applicable	Note ...: not applicable
53	Note ...: not applicable	90,276	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	93,171	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,152	Note ...: not applicable	Note ...: not applicable
54	Note ...: not applicable	90,631	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	91,432	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	5,148	Note ...: not applicable	Note ...: not applicable
55	Note ...: not applicable	88,035	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	89,239	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,651	Note ...: not applicable	Note ...: not applicable
56	Note ...: not applicable	88,107	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	88,685	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,656	Note ...: not applicable	Note ...: not applicable
57	Note ...: not applicable	87,437	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	87,465	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,375	Note ...: not applicable	Note ...: not applicable
58	Note ...: not applicable	86,501	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	87,051	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	2,596	Note ...: not applicable	Note ...: not applicable
59	Note ...: not applicable	89,778	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	87,902	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	4,127	Note ...: not applicable	Note ...: not applicable
60	Note ...: not applicable	84,470	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	86,436	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-1,675	Note ...: not applicable	Note ...: not applicable
61	Note ...: not applicable	84,531	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	86,426	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-2,682	Note ...: not applicable	Note ...: not applicable
62	Note ...: not applicable	82,866	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	85,616	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-5,094	Note ...: not applicable	Note ...: not applicable
63	Note ...: not applicable	81,274	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	83,752	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-6,386	Note ...: not applicable	Note ...: not applicable
64	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
65	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
66	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
67	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
68	55,901	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	57,417	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-3,708	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
69	55,516	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	57,417	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-6,869	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
70	53,802	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	56,250	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-8,002	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
71	52,314	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	54,744	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-8,699	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
72	55,408	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	57,203	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-9,830	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
73	55,378	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	58,291	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-11,423	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
74	55,975	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	57,610	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-10,878	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
75	57,475	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	58,762	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-11,581	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
76	55,471	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	56,463	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-11,194	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
77	58,075	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	54,793	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-8,440	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
78	56,627	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	56,393	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-12,313	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
79	57,495	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	56,573	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-13,262	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
80	54,687	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	56,612	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-14,991	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
81	53,855	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	54,337	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable	-13,024	Note ...: not applicable	Note ...: not applicable	Note ...: not applicable
Source: Author’s calculations based on data from Statistics Canada, Distributions of Household Economic Accounts, and Table 18-10-0005-01, Consumer price index, annual average, not seasonally adjusted.

Generation X spent less than their household income when they reached a median age of 47 in 2019, at $100,100 for consumption versus $102,500 for income, while boomers spent more when they reached that same age in 2003, at $86,700 for consumption vs. $84,900 for income. Both generation X and boomers increased their pension entitlements, however, which more than compensated for their spending, resulting in positive net saving for both generations. Net saving for generation X ($16,100) was more than two times higher than for boomers ($6,900) at the same median age of 47 years old.

Boomers and the pre-1946 generation both had negative net saving, at -$6,400 and ‑$3,700 respectively, as they spent more than their disposable income when they reached a median age in their sixties and they withdrew more from their pensions than they contributed or earned through investment interest. Despite their negative net saving, older generations may be able to maintain their future consumption as they have accumulated significant assets from which to draw upon when needed.

Generation X have highest debt-to-income ratio, but ratio for millennials increases

As indicated in chart 6, while the debt-to-income ratio was highest in 2019 for generation X households, at 220%, that ratio has decreased by 18 percentage points since 2010 as their disposable income grew by more than their mortgage debt. In contrast, millennials have increased their ratio by 21 percentage points, from 178% in 2010 to 199% in 2019. While growing real estate values for millennials have more than compensated for their increased debt holdings since 2010, disposable income has not kept pace, growing at an average rate of 5% per year compared with 6% for total debt.

Data table for Chart 6



Data table for Chart 6
Table summary
This table displays the results of Data table for Chart 6. The information is grouped by Generation (appearing as row headers), 2010 and 2019, calculated using percent units of measure (appearing as column headers).

Generation	2010	2019
	percent
Millennials	178.1	199.2
Generation X	237.7	220.2
Baby boom	151.1	163.7
Pre-1946	65.9	50.7
Source: Statistics Canada, Table 36-10-0589-01, Distributions of household economic accounts, wealth indicators, by characteristic, Canada, annual.

Millennials’ economic well-being more at risk as they work in industries deeply affected by the COVID-19 pandemic

According to the Labour Force Survey, summarized in chart 7, as of the second quarter of 2019, millennials accounted for 69% of employment in accommodation and food services, 57% in retail trade, and 56% in information, culture and recreation.

Data table for Chart 7



Data table for Chart 7
Table summary
This table displays the results of Data table for Chart 7. The information is grouped by Industry (appearing as row headers), Millennials, Generation X and Baby boom and pre-1946, calculated using share of generation total units of measure (appearing as column headers).

Industry	Millennials	Generation X	Baby boom and pre-1946
	share of generation total
Goods-producing industries	43.0	33.3	23.7
Other services-producing industries	42.3	34.7	22.9
Retail trade	57.1	23.5	19.3
Information, culture and recreation	55.9	26.9	17.2
Accommodation and food services	69.2	18.5	12.3
Source: Author’s calculations based on data from Statistics Canada, Labour Force Survey, Public Use Microdata File.

As noted in recent assessments of the Canadian economy (Statistics Canada, September and August 2020; Conference Board of Canada, August 2020; Bank of Canada, July 2020; C.D. Howe Institute, 2020), while financial markets and real estate values have remained relatively stable since the beginning of the year, the COVID‑19 pandemic is having a more noticeable impact on employment, especially in industries in which youth account for a majority of workers.

In particular, while reductions in employment for millennials were greater than for older generations across all industry types, they were especially severe in services-producing jobs, where younger generations tend to comprise a higher share of the total workforce. As shown in chart 8, as of the second quarter of 2020, employment for millennial workers fell by about 45% from the prior year in accommodation and food services, by 29% in information, culture and recreation, and by 20% in retail trade.

Data table for Chart 8



Data table for Chart 8
Table summary
This table displays the results of Data table for Chart 8. The information is grouped by Industry (appearing as row headers), Millennials, Generation X and Baby boom and pre-1946, calculated using % units of measure (appearing as column headers).

Industry	Millennials	Generation X	Baby boom and Pre-1946
	%
Accommodation and food services	-45.1	-35.8	-32.0
Information, culture and recreation	-28.5	-11.8	-18.1
Retail Trade	-20.4	-12.9	-8.8
Other services-producing industries	-8.0	-6.4	-8.0
Goods-producing	-14.0	-11.4	-10.9
Source: Author’s calculations based on data from Statistics Canada, Labour Force Survey, Public Use Microdata File.

…and younger generations have less equity from which to draw upon when needed

Going forward, millennials may continue to face challenges in servicing their consumption and debt obligations, as they have not accumulated as much equity in financial and real estate assets from which to draw upon relative to older generations. As indicated in chart 9, the net worth of millennials, as measured by the value of their financial assets and their equity in real estate and other non-financial assets, is about one-third the value held by generation x, one-fifth of that for boomers, and one-third of that for the pre-1946 generation.

Data table for Chart 9



Data table for Chart 9
Table summary
This table displays the results of Data table for Chart 9. The information is grouped by Generation (appearing as row headers), Millennials, Generation X, Baby boom and Pre-1946, calculated using dollars units of measure (appearing as column headers).

Generation	Millennials	Generation X	Baby boom	Pre-1946
	dollars
Financial assets	137,907	469,322	780,598	444,804
Owner's equity, all non-financial assets	105,151	278,181	390,833	287,132
Balance of primary Income	103,975	143,070	86,853	27,675
Net transfers received	-23,786	-40,605	-5,578	26,181
Net worth	243,058	747,503	1,171,431	731,936
Source: Statistics Canada, Distributions of household economic accounts, Wealth, Table 36-10-0585-01, and income consumption and saving, Table 36-10-0587-01.

In conclusion, as the impacts of the COVID-19 pandemic continue to work their way through the economy, the well-being of millennials may be more at risk relative to older generations, despite the introduction of unprecedented income support programs. Due to uncertainty in their disposable income, some millennials may choose to postpone major life events such as buying a house, starting a family and investing in their children’s education.

Appendix

Characteristics by generation for the major income earner in a household, Distributions of Household Economic Accounts for the 2019 reference year

Pre-1946 generation

• Born: Before 1946
• Age range: 74 to 99
• Median age: 81
• Average age: 82
• Share of population aged 15 years and over: 16%

Baby boom generation

• Born: 1946 to 1964
• Age range: 55 to 73
• Median age: 63
• Average age: 63
• Share of population aged 15 years and over: 31%

Generation X

• Born: 1965 to 1980
• Age range: 39 to 54
• Median age: 47
• Average age: 46
• Share of population aged 15 years and over: 27%

Millennials

• Born: After 1980*
• Age range: 16 to 38
• Median age: 31
• Average age: 30
• Share of population aged 15 years and over: 26%

* Millennial households include generation Z, those with a major income earner born after 1996, as their sample size is relatively small.

References

Bank of Canada (2020 07 15). Monetary Policy Report.

C.D. Howe Institute (2020). Education, Skills and Labour Market.

Conference Board of Canada (2020 08). Canadian Outlook Economic Forecast: Household Consumption.

Organisation for Economic Co-operation and Development (2013). OECD Framework for Statistics on the Distribution of Household Income, Consumption and Wealth.

Pettinger, Tejvan (2019 05 24). Life-Cycle Hypothesis.

Pew Research Center (2015 09 03). The Whys and Hows of Generations Research, September 3, 2015.

Statistics Canada (2016 05 31). Methodological Guide: Canadian System of Macroeconomic Accounts. Catalogue no. 13-607-X.

Statistics Canada (2016 05 31). User Guide: Canadian System of Macroeconomic Accounts. Catalogue no. 13-606-G.

Statistics Canada (2019 04 18). Economic Well-being Across Generations of Young Canadians: Are Millennials Better or Worse Off?, Economic Insights. Andrew Heisz and Elizabeth Richards. Catalogue no. 11-626-X, No. 092.

Statistics Canada (2020 01 22). Consumer price index, annual average, not seasonally adjusted. Table 18-10-0005-01.

Statistics Canada (2020 06 26). Distributions of Household Economic Accounts, Satellite Accounts and Special Studies.

Statistics Canada (2020 06 26). Distributions of household economic accounts for income, consumption, saving and wealth of Canadian households, 2019. The Daily.

Statistics Canada (2020 06 26). Distributions of Household Economic Accounts, estimates of asset, liability and net worth distributions, 2010 to 2019: Technical methodology and quality report. Income and Expenditure Accounts Technical Series. Catalogue no. 13-604-M.

Statistics Canada (2020 08 28). Gross Domestic Product, income and expenditure, second quarter 2020, The Daily.

Statistics Canada (2020 09 04). Labour Force Survey, August 2020. The Daily. Catalogue no. 11-001-X.

Statistics Canada (2020 09 04). Labour Force Survey, Public Use Microdata File.

Szenberg, M. and Ramrattan, L. (2008). The Life Cycle Hypothesis, chapter 4 in Franco Modigliani, Great Thinkers in Economics Series, 2008.