March 8, 2013 - In her Economy Lab blog for The Globe and Mail, MLI Senior Fellow Linda Nazareth writes about the economic significance of baby boomer couples living apart. Hear what she has to say in her full column copied below:
By Linda Nazareth, The Globe and Mail, March 8, 2013
Sometimes tiny trends can have big implications, particularly when you are watching the baby boomers. That's why a Statistics Canada report saying that 7 per cent of Canadians aged 20 and over had a significant other, but did not live with them, caught my eye. If being together but not actually being together all the time is for real, it would have significant implications for real estate and for consumer trends in general.
The technical term for those who are in a stable relationship, but living apart is "living apart together" (LAT). There is kind of a Hollywood-chic vibe to it (think Tim Burton and Helena Bonham Carter, or further back, Woody Allen and Mia Farrow), but most people cite more prosaic reasons than being cool for why they are not cohabitating. For those in their 20s, it is mostly because they have not gotten around to moving their stuff in to the other person's home, with or without a wedding first. Among those aged 20 to 24, nearly one-in-three were in a LAT relationship in 2011, although 80 per cent said they did want to eventually live with their LAT partner.
To me, the more interesting trend is in those aged 60-plus who prefer to keep their own space while still being part of a couple. As of 2011, 2.3 per cent of those aged 60 or older were apparently in a LAT couple, compared to 1.8 per cent in 2001. That may not sound like a lot, but given the rapidly aging population, it is a trend that could encompass a lot of people over the next decade or so.
The phenomenon smacks of a baby boomer trend, although the data are not exactly clear as to whether it is 60-somethings or 80-somethings that are the LATs in this older demographic. Still, although Statscan does not break the figures down beyond "60-plus," it seems reasonable to think that baby boomers – the oldest of whom were 65 in 2011 – were starting to have a large influence on the figures. We know that boomer divorce rates have typically been high, even in later life, and that the number of single-family households has been climbing precipitously. It is not much of a stretch to believe that some of this might relate to those aged 60-plus who are not in hurry to set up household with someone else, even while wanting to be part of a couple.
So what is the economic significance of the "living apart couple?" Well, it could have a real impact in real estate terms, if indeed this is a trend that continues. We already have a push toward a lot of one-person households, which is a reason the condominium craze has yet to die down. If indeed people will be choosing to maintain a couple of separate residences rather than one larger one, that could have a significant economic impact.
The question is, can boomers as a group really afford to live like Tim and Helena? I would say probably not. Whatever the need for own space, other data sets show pretty clearly that boomers need retirement income even more. That would suggest that it is only a selective few that will be able to choose to live like Hollywood royalty; the rest will have to figure out how to band together to keep out of the cold.
Linda Nazareth is the principal of Relentless Economics Inc. and a senior fellow at the Macdonald Laurier Institute