The number of young adults is increasing, not declining, and a larger share of them are living in cities.
Yesterday’s New York Times Upshot features a story from Conor Dougherty–”Peak Millennial? Cities Can’t Assume a Continued Boost from the Young.” It questions whether the revival in city living is going to ebb as millennials age, and the number of persons turning 25 decreases in the years ahead.
In our view, the story offers two mistaken premises: first, that the growth of young adults in cities has been driven primarily by the large size of the Millennial generation, and second, that the affinity of young adults for cities is waning. Our research shows that neither of these premises is true. The movement of young adults to the city has been gathering steam for more than 25 years, and the number of young adults in cities was actually increasing during the 1990s–at a time when the number of 25 to 34 year olds nationally was actually declining. And the relative preference of young adults for city living continues to increase.
The argument that as millennials age they will increasingly move to the suburbs mistakenly conflates life-cycle effects with generational change. As individuals age, the likelihood that they’ll live in different places changes. After high school, there’s a large migration to college towns. Young adults, starting out in their careers are disproportionately likely to rent and live in cities compared to other Americans. As they get older, find partners and have children, they’re more likely to own homes and live in the suburbs. This general pattern of succession holds for most recent generations as they age. But what’s different–and important–is how many people are in each generation, and how long they remain in each stage in this process. What’s happening now is that today’s young adults–the so-called Millennial generation–are both more numerous than the immediately preceding generation and are demonstrating a greater propensity to spend a larger share of their early adult years living in cities. That’s the essence of what our research (and that of many others) shows has been happening.
The Upshot story takes issue with this thesis in two respects. First, building on an argument advanced by USC’s Dowell Meyers––which we addressed when it first came out–Upshot says that the fortunes of cities will wane because the number of persons turning 25 years of age will decline slightly in the next decade. Second, Upshot says that as individual millennials get older, they’ll tend to move to the suburbs in greater numbers.
The essence of the Upshot story is two claims: (1) that the impact of millennials on cities will decline because their numbers will decrease, and (2) that their propensity to choose to live in urban settings will decline. Let’s consider each of these ideas in turn.
The number of 25-34 year old millennials will increase by about 3 million over the next 7 years; this is the stage in the life cycle when they are most likely to live in cities.
Is the move to cities being buoyed by the rising number of millennials, and will their numbers decline soon, and therefore cause a decline in cities?
What’s interesting is that in 2015—for the first time—Millennials (those born between 1980 and 2000) constitute all of the persons aged 25-34. At the time of the last decennial census (2010), about half of the 25- to 34-year-old age group was composed of people in the tail end of generation X, and half were the early wave of Millennials. So strikingly, what the Census data shows is that the total number of 25 to 34 year olds in the US will increase from now through 2024. This chart shows the Census Bureau’s estimates of population aged 25 to 34 based on historical data through 2014 and its projections through 2035.
During the 1990s the number of 25 to 34 year olds actually declined as Baby Boomers aged out of this age group and were gradually replaced by the numerically smaller Generation X. Between 2000 and 2010 the number of Gen-Xer 25-34 year-olds increased slowly, with all of the aggregate increase in this age group being recorded after 2008. So, to the extent there was a movement back to the city in the 1990s, and the first half of the 2000-2010 decade, it was propelled not by an aggregate increase in the number of 25-to-34 year olds in the nation, but the changing relative preference of young adults for urban locations.
So, what we—and others—have recorded as the movement of young adults back into cities has, until very recently, little to do with the size (or preferences) of the Millennial generation. In fact, as they turn 25, and as they now dominate this age cohort, the next decade will be the time when the Millennial generation’s effect on cities will be most fully felt. Rather than declining, the number of 25-to 34 year olds in the United States will increase each year from now through 2024, rising from 44.1 million in 2015 to 47.6 million in 2024. In reality, the Millennial wave of urbanism is just now hitting the beach.
The outlook after 2024 (when the 25-34 year olds will increasingly be “post-Millennials”) is not for a dramatic demographic collapse. Rather than a peak, the young adult population stabilizes at a fairly high plateau above 47 million 25 to 34 year olds through 2035. So there is little basis for forecasting a decline in the key population group that has driven urban growth.
With each passing year, 25-34 year olds, especially those with a four-year college degree or more education are more likely to live in close-in urban neighborhoods than other Americans.
Are young adults becoming less likely to live in cities?
At City Observatory, we’ve tracked the carefully tracked the location of urban residents in America by age group over the past three decades. We’ve measured the relative preferences of young adults for close-in urban neighborhoods (census tracts within three miles of the center of the central business district). The relative preference is the probability that a young adult will live in a close in neighborhood compared to the probability than any other resident of any age would live in such a neighborhood. These figures are drawn from Table 5 of our Young and Restless report; we’ve computed relative preference by dividing the probability that a person aged 25 to 34 lives within a three-mile radius of the center of the CBD of one of the 51 largest metropolitan areas, and compared it to the probability that the average resident of a metropolitan area live in this radius. If 11 percent of 25 to 34 year olds live in the 3 mile radius, and 10 percent of the population as a whole lives inside that radius, the relative preference is 10 percent (11 percent/10 percent)=110 percent, meaning that a 25 to 34 year old is 10 percent more likely than the typical resident to live in this area.
Since 1980, the relative preference of young adults for close-in neighborhoods has increased steadily. In 1980, young adults were 10 percent more likely than all metro residents to live in these neighborhoods; in 1990 12 percent more likely, in 2000 32 percent more likely; and in 2010, 25 to 34 year olds were fully 51 percent more likely to live in close-in neighborhoods than other metro residents. The relative preference of 25 to 34 year olds with a four-year degree to live in such neighborhoods was even higher: over 100 percent in 2010.
Another way of looking at this is examining census data on where young adults live. The University of Virginia’s Luke Juday has prepared a revealing set of charts that show the concentration of the young adult population by distance to the city center for all of the nation’s 50 largest metro areas. He has comparative data for 1990, 2012 and 2015. The data–just as in the statistics cited above–show that in the aggregate, the share of young adults living in close-in neighborhoods has increased and the share living in more distant neighborhoods has decreased. The orange line shows the share of young adults (age 22 to 34) as a share of the population in 1990. The magenta and teal a lines show the share of young adults in 2012 and 2015 (respectively). The share of young adults living in close in neighobrhoods (which had been higher in the center in 1990) increased over the next two decades. The share living in the suburbs declined. The steepening of this gradient is clear evidence of a growing relative preference of young adults for central locations.
This essential finding is actually the core of several well regarded academic papers. Edlund, Machado and Siviatchi show that well-educated prime-age workers are increasingly concentrated in neighborhoods closer to the center of the metropolitan area. Couture and Handbury have replicated our findings, reporting:
A recent report by CEO for Cities (Cortright (2014)) – and covered extensively by the New York Times (Miller (2014)) – also uses 2000 census data and 2007-2012 ACS data, and shows that the 25-34 college-educated population are growing faster downtown than in the suburbs in the majority of the 51 largest MSAs. We confirm and expand this narrative to the older 35-44 college-educated group . . . Strikingly,we find that the college-educated 25-34 age group grows faster in the urban area of 23 of the 25 largest CBSAs. The exceptions are Riverside, which essentially lacks a downtown, and Detroit, which is famously struggling.
These papers, and Rebecca Diamond’s research show that the attraction of cities is amplified by the growth of and growing demand for urban amenities.
More young adults are migrating to cities
Finally, almost in passing, the Upshot article resurrects a claim made in 2015 by FiveThirtyEight.com’s Ben Casselman, which had asserted that more young adults were now moving from cities to suburbs than vice versa, and claiming “Whether by choice or economic circumstance, young Americans are still more likely to leave the city for the suburbs than the other way around.” We had a lengthy back-and-forth with Casselman at the time, but the University of Virginia’s Luke Juday pointed out that the data that Casselman used from the Currently Population Survey effectively missed millions of young adults, and disproportionately missing those living in cities. Juday’s analysis shows that actually the reverse is true–young adults are increasingly moving to cities:
Over the past 5 years about 3 million more Americans age 20-29 moved from suburbs to principal cities than from cities to suburbs, with last year being the largest net gain for cities yet.
The Takeaway: More Young Adult Urban Growth is Coming
The number of 25 to 34 year olds—the key group driving urban living, will not decline, but will grow between now and 2024. The urban wave we’ve experienced starting in the 1990s, and accelerating in the past decade wasn’t propelled by generational growth, so much as by a growing preference for urban living by young adults. The shift of young adults to cities, drawn by urban amenities, is increasingly confirmed by academic researchers, and is borne out by the latest Census data.
The Census data for our of estimates of the 25 to 34 year old population come from three sources. Data for the period prior to 2010 comes from the archive of historical Census population estimates (https://www.census.gov/popest/data/historical/index.html).
Data for the period 2011 to 2014 comes from Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties, and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2014, Source: U.S. Census Bureau, Population Division, Release Date: June 2015. See: https://www.census.gov/popest/data/. Census projections of the population by year and age for the period 2015 through 2035 come from the 2014 Census Population Estimates series http://www.census.gov/population/projections/data/national/2014.html.
* Note the discontinuity in the data between 1999 and 2000 reflects the disparity between the Census Bureau’s annual intercensal estimates of the 25-34 year-old population and the actually higher number of 25-34 year olds enumerated by the 2000 decennial Census. It’s likely that the actual number of 25-34 year olds was underestimated in the intercensal estimates, during a period of significant immigration).