Millennial economics

Millennials, also known as Generation Y, are the demographic cohort following Generation X and preceding Generation Z. The generation is typically defined as people born from 1981 to 1996. Using a variety of measures, economists have reached the conclusion that the rate of innovation and entrepreneurship has been declining across the Western world between the early 1990s and early 2010s, when it leveled off. In the case of the U.S., one of the most complex economies in existence, economist Nicholas Kozeniauskas explained that "the decline in entrepreneurship is concentrated among the smart" as the share of entrepreneurs with university degrees in that country more than halved between the mid-1980s and the mid-2010s. There are many possible reasons for this: population aging, market concentration, and zombie firms (those with low productivity but are kept alive by subsidies). While employment has become more stable and more suitable, modern economies are so complex they are essentially ossified, making them vulnerable to disruptions.

In Asia Statistics from the International Monetary Fund (IMF) reveal that between 2014 and 2019, Japan's unemployment rate went from about 4% to 2.4% and China's from almost 4.5% to 3.8%. These are some of the lowest rates among the largest economies of the world. However, due to long-running sub-replacement fertility, Japan had just over two workers per retiree in the 2010s, compared to four in North America. As a result, the country faces economic stagnation and serious financial burden to support the elderly. China's economy was growing at a feverish pace between the late 1970s till the early 2010s, when demographic constraints made themselves felt. Key to China's "economic miracle" was its one-child policy, which curbed population growth and enabled the economy to industrialize rapidly. Yet the policy has also led to population aging. Political economist and demographer Nicholas Eberstadt argued that China's working population peaked in 2014. Even so, economist Brad Setser suggested that China can still increase its GDP per capita by raising the age of retirement and making it easier for people to migrate from rural to urban areas. But social scientist Wang Feng warned that as the population ages, social welfare spending as a share of GDP will also grow, intensifying sociopolitical problems. During the mid-2010s, China had five workers for every retiree. But if current trends continue, by the 2040s, that ratio will fall to just 1.6. At the start of the twenty-first century, export-oriented South Korea and Taiwan were young and dynamic compared to Japan, but they, too, were ageing quickly. Their millennial cohorts are too small compared to the baby boomers. The fact that large numbers of South Koreans and Taiwanese were entering retirement will restrict the ability of their countries to save and invest. According to IMF, "Vietnam is at risk of growing old before it grows rich." The share of working-age Vietnamese peaked in 2011, when the country's annual GDP per capita at purchasing power parity was $5,024, compared to $32,585 for South Korea, $31,718 for Japan, and $9,526 for China. Many Vietnamese youths suffer from unstable job markets, low wages, and high costs of living in the cities. As a result, large numbers live with their parents till the age of 30. These are some of the reasons contributing to Vietnam's falling fertility rate and population aging.

In Europe

Economic prospects for some millennials have declined largely due to the Great Recession in the late 2000s. Several governments have instituted major youth employment schemes out of fear of social unrest due to the dramatically increased rates of youth unemployment. In Europe, youth unemployment levels were very high (56% in Spain, 44% in Italy, 35% in the Baltic states, 19% in Britain and more than 20% in many more countries). In 2009, leading commentators began to worry about the long-term social and economic effects of the unemployment. A variety of names have emerged in various European countries hard hit following the 2008 financial crisis to designate young people with limited employment and career prospects. These groups can be considered to be more or less synonymous with millennials, or at least major sub-groups in those countries. The Generation of €700 is a term popularized by the Greek mass media and refers to educated Greek twixters of urban centers who generally fail to establish a career. In Greece, young adults are being "excluded from the labor market" and some "leave their country of origin to look for better options". They are being "marginalized and face uncertain working conditions" in jobs that are unrelated to their educational background, and receive the minimum allowable base salary of €700 per month. This generation evolved in circumstances leading to the Greek debt crisis and some participated in the 2010–2011 Greek protests. In Spain, they are referred to as the mileurista (for €1,000 per month), in France "The Precarious Generation," and as in Spain, Italy also has the "milleurista"; generation of €1,000 (per month). Between 2009 and 2018, about half a million Greek youths left their country in search of opportunities elsewhere, and this phenomenon has exacerbated the nation's demographic problem. Such brain drains are rare among countries with good education systems. Greek millennials benefit from tuition-free universities but suffer from their government's mishandling of taxes and excessive borrowing. Greek youths typically look for a career in finance in the United Kingdom, medicine in Germany, engineering in the Middle East, and information technology in the United States. Many also seek advanced degrees abroad in order to ease the visa application process. In 2016, research from the Resolution Foundation found millennials in the United Kingdom earned £8,000 less in their 20s than Generation X, describing millennials as "on course to become the first generation to earn less than the one before". According to a report from the same organization in 2017, the rate of home ownership of British baby boomers was 75% and "the real value of estates passing on death has more than doubled over the past 20 years." For this reason, the transfer of wealth between the baby boomers and their children, the millennials, will prove highly beneficial to the latter compared to previous cohorts, especially those who came from high-income families.

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