2010-11-25

Social changes in America

Post-Recession America: Falling Incomes, Rising Cohabitation, Fewer Babies
According to Preston, increasing household size is expected when poverty increases. He points out that 100 years ago, when more than half the country was considered impoverished, people had much larger households because extended families lived together, people took in borders, and multiple families lived under one roof. "It's been shown over and over again that when income grows, people express their preference for small living units," he says.

But will such demographic shifts reverberate to the economy? Wolfers says the current cohabitation trend has particular implications for the housing market. "It's definitely the most striking number from the survey," he says. "One simple way of characterizing the current housing slump is that prices are likely to remain low because we have too many houses relative to the number of households. Rising cohabitation and increasing 'doubling up' will likely exacerbate this problem, as the existing population is organizing itself into even fewer households," he adds. "This could be a factor [hindering] the recovery of the housing sector."
The article also mentioned birth rates:
If incomes continue to decline, will a couple's decision to have a child be affected? The latest Census Bureau poll found that 4.3 million women gave birth in the 12 months before the 2009 survey, down from 2008's 4.4 million women, but up from the 4.2 million during each of the previous two years.

Those results, of course, don't tell the whole story about how external factors influence couples, not least because of the nine-month lag between conception and childbirth. Yet a nationwide study published in April by the Pew Research Center, a public opinion research organization in Washington, D.C., showed a correlation between declining birth rates and increasing economic hardship in the U.S. "Strong associations were found between the magnitude of state-level birth rate change from 2007 to 2008 and the magnitude of the previous year of per capita income change and housing price change," the study's report stated.
For an in-depth explanation of the socionomic approach to birth rates, see A Socionomic View of Demographic Trends or Stocks & Sex
Why would births and the stock market trend together, if they do at all? Sometimes answers can be found in subtleties. Notice that the deepest low in births this century came in 1933, the year after the deepest low in the stock market this century. Notice that the second most important low in births occurred again in 1975, one year after the second most important stock market low of this century. Why would there be a one-year lag? Well, can you think of any activity that always precedes a birth by about a year? If so, could this activity be correlated directly with people’s moods and therefore the trend and level of the stock market? Chapter 14 of The Wave Principle of Human Social Behavior characterizes a rising social mood trend as correlating, among other things, with “friskiness, daring and confidence,” a falling trend with “somberness, defensiveness and fear.” We now have a tenuous basis for a socionomic hypothesis regarding demographic trends.

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