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High rise condominiums along Toronto’s waterfront. (Moe Doiron/The Globe and Mail)
High rise condominiums along Toronto’s waterfront. (Moe Doiron/The Globe and Mail)

Smaller households, big implications Add to ...

There are now more one-person households in Canada than there are two-parent households with children. It was just one statistic that came out last week’s installment of Statistics Canada’s 2011 Census of Population, but it was powerful.

If you go back to 1971, more than 61 per cent of Canadian households were comprised of three or more people and the household type that dominated was families with children. Of all households who described themselves as ‘families’ in 1971, 90.6 per cent were headed by a married couple. Flash forward to 2011, and Canadian households with three or more people was only 38 per cent of the total. In addition, of those who said they were ‘family’ households, only 67 per cent were headed by a married couple. What really catches your eye, though, is the rise in one-person households.

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As of 2011, there were 3.67 million one-person households, and only 3.52 million households with children. Lone person households accounted for 27.6 per cent of all households in 2011, up from 13.4 per cent in 1971 and 22.9 per cent in 1991.

It is hard to pin the rise in single person households on one factor. Higher divorce rates, elderly widows living longer, a higher average age for first time marriages that causes younger people to live alone for longer – a lot of things are at play, and have been for a while. A good twenty years ago, it was clear that lone person households were on the rise, and now they are something close to the norm.

So what are the economic implications for a society with a lot of single-person households? Well, the more households you have, the more homes you are going to need built. The rise in smaller households certainly favours condominium ownership. You do not need a fancy economic model to see the correlation between the high number of single-person households in places like Vancouver, Toronto and Montreal, and the condo booms in those cities.

On the downside, smaller households also mean (on average) households with lower median incomes. We have heard a lot about the stagnation in real household incomes, and it is a real phenomenon. Having said that, households with one earner are going to have a lower income base than those with multiple earners. It is not the only factor behind the problem – forty years ago families tended to have one earner anyway – but it is definitely skewing the numbers lower.

What else? Well, retailers have taken some note of smaller household size, already, of course, but I would argue not enough. There is a market for family-size bulk packs (hello, Costco) but clearly there is a larger market for individual portions, and I do not just mean for microwaveable meals. Meats, vegetables, bakery items – all are typically sold in portions to feed a family of four. Might be time to re-think that.

And then there are the government policy implications – and those are serious ones. Smaller households mean smaller savings for retirement. That’s not a good trend at a time when people are not putting away enough money and interest rates are not encouraging them to do more.

Trends change, of course, but I think this one has legs and by the next census I see it as one that is only going to be more pronounced. For one thing, Generation Y is headed into their twenties (the leading edge of them are already there) and will be forming households. For another, this time around the number of 20-somethings living with their families rather than alone was no doubt boosted by the weak(ish) economy and a high unemployment rate for younger people. Assuming better economic times ahead (call me an optimist), they will be moving out.

Politicians, no doubt, will also take note of the one-person household phenomenon. Political promises tend to focus on what is good for families, and of course everyone has a stake in that. It looks like there might be some votes in catering to the agendas of those who are (happily or unhappily) going it alone.

Economist Linda Nazareth is the principal of Relentless Economics and senior fellow for economics and population change at the Macdonald Laurier Institute. Visit her at relentlesseconomics.com

Follow on Twitter: @relentlesseco

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