Baby Boomer Age Wave Theory
What Is the Baby Boomer Age Wave Theory?
The baby boomer age wave theory is a theory with respect to the economic impact of demographic trends developed by psychologist and gerontologist Ken Dychtwald and furthermore promoted by investment manager Harry Dent.
In light of this theory, Dent anticipated that the economy would enter a supported period of decline once the baby-boom generation passed the age of their pinnacle consumer spending and pushed toward retirement and that U.S. also, European markets would almost certainly top somewhere in the range of 2008 and 2012, the period when most baby boomers arrived at age 50.
Understanding the Baby Boomer Age Wave Theory
"Baby boomer" is a term normally used to depict any person brought into the world between the finish of World War II and the mid-1960s. After the finish of WWII, rates of birth spiked across the globe. During this period, 72.5 million children were brought into the world in the U.S. alone, a phenomenon known as the baby boom. Due to the tremendous size and purchasing power of baby boomers, this generation would in general hugely affect economies.
Starting around 2020, baby boomers make up the second-biggest generation of the United States, at 21.45% of the population. The biggest generation is the millennial generation, making up 21.93% of the population.
In his 1989 book, Age Wave: The Challenges and Opportunities of an Aging America, Ken Dychtwald noticed population and social shifts, gathering them into three major demographic powers:
- The Baby Boom: An increase in fruitfulness rates in the United States, Canada, Europe, and Australia during the twentieth century.
- Prolonged Longevity: Life expectancy increased essentially during the twentieth century due to advances in medication, sustenance, and public wellbeing.
- The Birth Dearth: Following the baby boom, fruitfulness rates dropped pointedly, and many parts of the world are presently encountering sub-substitution ripeness rates.
Dychtwald's theory recommends that due to the size and propensities of the baby-boom generation, this population has the power to transform consumer trends and life stages. Critical market shifts across a scope of industries are associated with the age wave, remembering the impact for the production and sales of rural homes, fast food, rec center equipment, toys, minivans, and SUVs.
Noticing the impact of the baby boomers, Dychtwald claims that their aging will probably bring about a shift in consumer activity from youth-centered products toward products and services taking special care of the old. In the end, he warns that the age wave will put a burden on the economy as the baby boomers draw a pension and experience medical problems.
In 2006, Dychtwald likewise anticipated a huge lull in labor force growth, contending the generations that followed the baby boomers would fail to duplicate the quantity of labor given by the tremendous number of individuals brought into the world in the 19 years after World War II.
Following Dychtwald, investor Harry Dent has made forecasts since the 1980s, building on the age wave concept to warn that an economic top in U.S. also, European markets would happen somewhere in the range of 2008 and 2012 as the last individuals from the baby-boom generation arrived at 50 — the age he accepts consumer spending habits top.
As per the Dent method, after age 50, boomers live in more modest families, have less to purchase, and progressively pare back on spending.
Business analysts and social pundits keep on discussing the legitimacy of the baby boomer age wave theory and its effects. Nonetheless, one thing a large portion of them seem to settle on is that the baby-boomer generation fundamentally affects economic and social trends, both in the U.S. what's more, around the world.
As the baby boom population keeps on moving into retirement age, financial specialists hope to see a decline in overall consumption and increase in demand for services, for example, caretaking, estate and retirement planning, as well as products for the elderly. This shift will probably, thus, impact interest rates, inflation, real estate, stock prices, innovation trends, and other economic factors.
Features
- Ken Dychtwald's baby boomer age wave theory contends that the aging of the baby boomer generation has had, is having, and will keep on groundbreakingly affecting society and the economy.
- As indicated by Dent, U.S. what's more, European markets would almost certainly top somewhere in the range of 2008 and 2012, the period when Baby Boomers hit 50.
- Broadening Dychtwald's thought, investor Harry Dent additionally anticipated that the economy would enter a supported period of decline as the baby boomers passed their pinnacle spending years.
FAQ
What Are the 6 Generations of a Population?
Right now, the six generations of the human population are the best generation (brought into the world somewhere in the range of 1901 and 1924), the silent generation (brought into the world somewhere in the range of 1928 and 1945), baby boom generation (brought into the world somewhere in the range of 1946 and 1964), Generation X (brought into the world somewhere in the range of 1965 and 1980), the millennial generation (brought into the world somewhere in the range of 1981 and 1996), and Generation Y (brought into the world between 1997 to the present).
What Is the Baby Boomer Generation Known For?
The baby boomer generation is known for being one of the biggest generations to have existed, as well as one with extreme longevity. It is known for generating income through traditional means in the labor force, as well as consuming taxes of more youthful generations through Social Security as it progresses in years.
Which Is the Smartest Generation?
The millennials are viewed as the savviest generation given their broad instructive foundation as well as their access to data through the Internet as they were transitioning.
