Canadian millennials richer, more likely to be working than U.S. counterparts
Better job prospects and better access to credit north of the border
Canadians aged 25 to 34 are richer, more likely to own a home and more likely to be working than their American contemporaries, according to a study by TD Economics.
A large part of this economic success among Canadian millennials comes as result of a new generation of young women who are better educated and more likely to be working than both American women and previous generations.
Economists Beata Caranci and Diana Petramala say there's no question the 2008-09 recession hit the millennial generation hard.
About 70 per cent of job losses in Canada took place among millennials, just as past recessions hit the youngest workers in 1980-81 and 1990-91.
"That typically is the case when times get tough. Often it's the younger part of the workforce with less seniority that suffers the biggest job losses," says Derek Burleton, deputy chief economist at TD Economics.
But the jobs came back faster in Canada than in the U.S. By September, joblessness among 25- to 34-year-olds was 6.7 per cent, though Canadians under age 24 continued to struggle to find work.
Parental leave helped young women
In the U.S., joblessness in the millennial age group averaged 8.6 per cent between 2010 and 2013.
Millennial females in Canada are better educated than men of the same age and more likely to be in the workforce than American women.
The economists attribute this to the 2001 extension of parental leave in Canada from 10 weeks to 35 weeks, which made it easier for women to work during their child-bearing years. In Canada, the female labour force participation among women 25 to 36 is 76 per cent, compared with less than 70 per cent in the U.S.
"A lot of the younger males have been attached to sectors in the economy that have been hit harder – the resource sector most recently, but also manufacturing," Burleton said.
"Women have higher education attainment and that's aligned with the service sector where we've seen a lot of the job creation over the last two to three years," he added.
More than half of Canadian millennials own a home, compared with 36 per cent of Americans in the age group.
That may be because they are more likely to have had help with a down payment from mom and dad.
House-poor young Canadians
Strong Canadian housing markets mean they are wealthier but also more in debt, in part because they have bought a home.
As there was no Canadian housing meltdown, their parents are better off than U.S. parents and it's been easier for them to obtain loans at low interest rates.
In Canada, average net worth of millennials is $155,400 Cdn and average debt is $113,200 Cdn.
In the U.S., it's $75,500 US in net worth and $82,400 US in debt, in part because of a high student loan balance.
That advantage for Canadians aged 25 to 34 may not last, if house prices sag or the economy here stagnates as the U.S. grows, the TD Economics report says.
"While millennials in Canada have higher net wealth than other cohorts did at their age and compared to millennials in the U.S., they are also more indebted, leaving them more vulnerable in the event of a home price correction."