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ABA Banking Journal Podcast

Feb 13, 2019

For Valentine’s Day, the ABA Banking Journal Podcast digs into trends on U.S. marriage and fertility rates and how they might affect financial institutions. Lyman Stone — an economist who researches demographics and migration at the Institute for Family Studies, American Enterprise Institute and Demographic Intelligence — discusses:

  • How the trend of postponed marriage, with the average adult expecting to spend half as many of their prime childbearing years married compared to 1960, has driven the U.S. to its lowest-ever fertility rate — even as survey research shows that women are having fewer kids than they want.
  • Why reduced childbearing hinders individual Americans’ use of bank products. “Lower odds of getting married and having kids reduces the odds of shifting out of that studio apartment into that starter home,” he says. “These people aren’t going to need mortgages as much and they won’t need them until later in life.”
  • The stark implications for a U.S. economy designed for growth. “How many American families’ balance sheets will make sense if real estate demand in their city is permanently declining?” asks Stone. “Suddenly the calculation on the value of your mortgage looks very different. . . . Population decline rips apart this set of financial instruments that Americans have relied on for generations.”
  • How bankers can connect with their younger customers by demonstrating they care about their well-being. “Perhaps it would be useful for our financial advisers to tell us, ‘The universal consensus of psychological and sociological research suggests that you will be a much happier person, more satisfied with your life, and less likely to die at a young age if you get married and have kids,'” Stone reflects. “At the end of the day, millennials do care about being cared about.”

To access a six-minute bonus clip with Lyman Stone on the effects of regional migration on community banks, click here.