Millennials Set Their Sights on Education as Interest in Cars, Homes Wanes
Millennials are forsaking new cars and large homes, but the generation of 20- and 30-somethings still has tremendous purchasing power—dollars that can be used to expand their knowledge base.
That’s at least part of the takeway in an illuminating piece by Derek Thompson and Jordan Weissmann that appeared in The Atlantic this month. After crunching the numbers and demonstrating this new generation is less interested in consuming the big-ticket goods—like homes and cars—that made past post-recession economies roar back, the piece considers what will this shoal of young spenders that makes up 23 percent of the population buy.
Education is the “obvious outlet for the money Millennials can spend,” Perry Wong, the director of research at the Milken Institute, told us, noting that if young people invest less in physical things like houses, they’ll have more to invest in themselves. “In the past, housing was the main vehicle for investment, but education is also a vehicle.” In an ideas economy, up-to-date knowledge could be a more nimble and valuable asset than a house.
The recession has been a boon to the education sector, but will it last? A March article in The Chronicle of Higher Education suggests the tea leaves point to the affirmative: In the last decade, investments in education start-ups tripled from $146 million to $429 million, with the expansion revving up most dramatically after 2009—when the economy was still reeling.
Millennials’ purchasing habits are possibly better geared for a knowledge economy, as denser urban areas and rideshares more and more supplant suburban homes with longer commutes. The Atlantic piece reports that economists see a 6 to 28 percent jump in productivity as a community doubles, and that density goes a long way toward explaining worker output. As the writers put it, “there’s a lot to be gained by increasing the odds that smart people might bump against each other.”
What do your beats suggest? Are Millennials swapping square footage and horse power for coding, design, and welding courses to have a leg up in this knowledge economy?