U.S. Demographics Continue to Change - Susanna Gotsch, Director, Industry Analyst, CCC - CCC Information Services
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Perspective
U.S. Demographics Continue to Change
Susanna Gotsch, Director, Industry Analyst, CCC
Much of our reported research over the last several The youngest Millennials are now in their 20’s – the age
months has focused on how the automotive claims and group Pew Research has defined Millennials as those
collision repair industries are experiencing declines in ages 23 to 38 in CY 2019. And, this year, Millennials are
claim frequency and increases in both total loss frequency expected to overtake Baby Boomers as the U.S.’s largest
and loss costs. Among the numerous factors that drive living adult generation, with an estimated 73 million
frequency are changes in demography, whether it’s where individuals - one million more adults than Baby Boomers
people are living, which portion of the population is (see Figure 1).2
working and driving most, and where people are choosing
to live. For example, the U.S. population continues to age As the first truly digital generation, Millennials were feared
and become more diverse and move to different parts of to be the first generation where smartphones and ride-
the U.S. – these are just several factors driving change in hailing would mean many would forego vehicle ownership.
claim frequency. Among the metrics supporting this theory was the drop
in licensed drivers as a percent of the total population
Demographics of Age and Its Impact on Miles Driven among the youngest age groups between CY 2008 and
CY 2014 (see Figure 2).3 However, the most recent data
Millennials have been perhaps the most-talked about from the U.S. DOT Federal Highway Administrations’ 2016
generation in the last several years. In many ways Highway Statistics points to some reversal of this trend,
Millennials are different from prior generations – research revealing a growing share of individuals among every
from the Pew Research Center reveals Millennials have age group now have driver’s licenses, with the largest
more racial and ethnic diversity; they are better educated increases among those aged 30-34 and 70-plus. Those
but have more debt and lower savings; they are foregoing aged 30-34 in CY 2016 are now aged 33-37, among the
marriage and have been slower to form their own oldest of the Millennials.
households, instead living at home with their parents for
longer stretches of time.1
1
Figure 1: Millennials Become Largest Segment of Population
Projected Population by Generation (in Millions) The Generations Defined
Born 1997 to 2011
Age in CY 2019 8-22 years
Born 1981 to 1996
Age in CY 2019 23-38 years
Born 1965 to 1980
Age in CY 2019 39-54 years
Born 1946 to 1964
Age in CY 2019 55-73 years
Born 1928 to 1945
Age in CY 2019 74-91 years
Source: Fry, Richard. “Millennials Projected to overtake Baby Boomers as America’s largest generation.” Pew Research Center, March 1, 2018. www.pewresearch.org.
Figure 2: Licensed Drivers as a Percentage of their Age-Group Population
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Age 17
Age 16
Age 19
Ages 65-69
Age 18
Ages ≥70
Ages 20-24
Ages 30-34
Ages 40-44
Ages 50-54
Ages 60-64
Ages 25-29
Ages 35-39
Ages 45-49
Ages 55-59
CY1983 CY2008 CY2011 CY2014 CY2016
Sources: Sivak and Schoettle, UMTRI; USDOT FWHA Highway Statistics 2016
2
A study by the Board of Governors of the Federal Reserve differences versus prior generations reveal that Millennials
System compared the socioeconomic and demographic don’t own fewer vehicles, and actually drive more miles
characteristics of Millennials versus prior generations. per year than Baby Boomers (see Figure 3).5 These
Conditional on their age and other factors, such as were the findings of the study by Christopher R. Knittel
differences in income, saving, and consumption, this and Elizabeth Murphy, “Generational Trends in Vehicle
study found Millennials don’t appear to have preferences Ownership and Use: Are Millennials Any Different?”.
for consumption that differ significantly from those of Millennials and Gen Z individuals have in fact seen steady
earlier generations.4 It’s these same differences in age, growth in their share of overall new vehicle registrations
income and other demographics that when controlled for per Experian (see Figure 4).6
Figure 3: Millennials Have Similar VMT and Vehicle Ownership After All
Conclusions:
NBER study of Millennials’ vehicle decisions
and whether they differ from those of 1) Results confirm Millennials’ observed decrease
previous generations. in vehicle ownership and VMT arises from
differences in demographics.
Focus on two main facets of personal mobility:
2) When Millennials and Baby Boomers with
1) Vehicle ownership, measured by how similar demographics are compared to each,
many vehicles a given household owns, Millennials have higher ownership rates and VMT.
2) Vehicle usage, measured by annual 3) Millennials are altering life-choices that affect
vehicle miles traveled (VMT). vehicle ownership.
Control for demographic and macroeconomic 4) However net effect of these endogenous choices
variables such as income, household size, is to reduce vehicle ownership by less than
location, education, sex, race, marital status, one percent (with effects larger than two
number of children, etc. percent statistically ruled out).
Source: Generational Trends in Vehicle Ownership and Use: Are Millennials Any Different? Christopher R. Knittel and Elizabeth Murphy NBER Working Paper No. 25674 March 2019
Figure 4: Experian New Vehicle Registrations By Generation Q1 2015 to Q1 2019
100%
10.6% 0.5% 9.9% 1.1% 9.6% 1.9% 9.0% 2.7% 3.8%
90% 8.3%
80%
27.4% 27.7% 27.2% 27.2% 27.1%
70%
60%
50% 24.7% 25.7% 26.0% 27.2% 28.6%
40%
30%
20%
36.9% 35.6% 35.2% 33.9% 32.2%
10%
0%
Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019
Baby Boomers Millennials Gen X Matures Gen Z Sources: Source: Experian Automotive Quarterly Briefing, First Quarter 2019, p. 27.
3
Finally, a third study further combats the theory that demographics and economic characteristics, rather than
generational differences are driving change in vehicle changes in household driving habits that largely explain
miles traveled, showing instead that changes in miles changes in VMT [vehicle miles traveled] between 1995 and
driven are impacted most by economic factors. The 2015 (see Figure 5).7 The study also predicts the average
Insurance Information Institute analysis of a study in annual VMT growth rate from 2015 to 2025 would be 0.9
the Energy Journal titled “Explaining the Evolution of percent, based on the opposing factors of rising income
Passenger Vehicle Miles Traveled in the United States” (which increases VMT) and aging population (which
highlighted the study’s conclusion that it was changes in decreases VMT).
Figure 5: Vehicle Miles Traveled (VMT), Income, and Employment Trends
Source: Source: III Quarterly PC Industry Snapshot, Published April 12, 2019. Data from Benjamin Leard, Joshua Linn, and Clayton Munnings, “Explaining the Evolution of Passenger
Vehicle Miles Traveled in the United States,” The Energy Journal, Vol. 40, No. 1, pp. 25-54.
Note: Vehicle Miles Traveled inlcudes light-duty vehicles. All data series are normalized to 1 in 1975. Shaded areas indicate National Bureau of Economic Research recession periods.
4
Miles driven in the U.S. had seen some large increases So far in CY 2019, miles driven continues to grow at a
coming out of the Great Recession, but the rate of slightly faster pace (latest data showing rolling 12 months
increase has slowed to only 0.4 percent between CY 2017 ending May’19 miles driving are up 0.7 percent from the
and CY 2018 (see Figure 6). rolling 12 months ending May’18).8
Figure 6: Annual Vehicle-Distance Traveled - Moving 12 Month Total on All Roads (Million Miles)
Percent Change from Prior Year (Jan92 to May19)
3,500 5%
% CHANGE IN MILES DRIVEN VS SAME PERIOD PRIOR YR
4%
3,000
3%
MILES DRIVEN, IN BILLIONS
2,500
2%
2,000
1%
1,500
0%
1,000
-1%
500
-2%
0 -3%
Jan-94
Jan-96
Jan-99
Jan-98
Jan-08
Jan-18
Jan-95
Jan-05
Jan-15
Jan-93
Jan-00
Jan-03
Jan-10
Jan-13
Jan-92
Jan-02
Jan-12
Jan-97
Jan-07
Jan-17
Jan-01
Jan-11
Jan-04
Jan-14
Jan-06
Jan-09
Jan-16
Jan-19
Miles Driven (in billions) % Chg Same Period Prior Yr
Source: FRED® Moving 12-Month Total Vehicle Miles Traveled, www.research.stlouisfed.org
5
This more recent slightly faster rate of growth may be in
part related to population shifts directly tied to where job
growth has been strong and increased suburbanization
(see Figure 7).9
Figure 7: Annual Growth Rates for Metropolitan and Non-Metropolitan Areas (200-2017)
Source: https://www.brookings.edu/blog/the-avenue/2018/03/26/us-population-disperses-to-suburbs-exurbs-rural-areas-and-middle-of-the-country-metros/
6While the rate of growth of the overall U.S. population continues to shift from the Northeast and Midwest to the
rose only 0.6 percent in the latest period ended July 1, South and the West (see Figures 8A-B).11 Not surprisingly,
2018 from prior year (the slowest rate of growth since a comparison to miles driven by Census Region also shows
1937 in data dating back to 1901),10 the U.S. population higher rates of growth in miles traveled in the South
and West.12
Figure 8A: Percent Change in MILES DRIVEN by Census Region vs. Prior Calendar Year
5.0%
3.8%
3.4%
4.0%
3.3%
2.9%
2.8%
2.6%
2.6%
2.5%
2.4%
3.0%
1.9%
1.7%
1.5%
1.3%
2.0%
1.3%
1.2%
1.0%
1.0%
0.9%
0.5%
0.4%
0.3%
1.0%
0.3%
0.1%
0.0%
-0.4%
-1.0%
-0.6%
WEST SOUTH NORTHEAST MIDWEST TOTAL U.S.
CY14 vs CY13 CY15 vs CY14 CY16 vs CY15 CY17 vs CY16 CY18 vs CY17
Figure 8B: Percent change in Resident Population (U.S. Census Bureau)
5.0%
4.0%
3.0%
2.0%
1.2%
1.1%
1.1%
1.1%
1.1%
1.0%
1.0%
0.9%
0.9%
0.9%
0.7%
0.7%
0.7%
0.6%
0.6%
1.0%
0.3%
0.2%
0.2%
0.2%
0.2%
0.2%
0.1%
0.1%
0.0%
0.0%
0.0%
WEST SOUTH NORTHEAST MIDWEST TOTAL U.S.
-1.0% CY14 vs CY13 CY15 vs CY14 CY16 vs CY15 CY17 vs CY16 CY18 vs CY17
Source: US DOT FHWA Office of Highway Policy Information Travel Monitoring. U.S. DOT.
7Immigration into the U.S. has slowed, and there have been Economic Growth and The Impact of E-Commerce on
fewer births and more deaths in recent decades as well. 13
Auto Sales and Miles Driven
Just-released census estimates show that between CY
2010 and CY 2018, the number of individuals in the U.S. Strong auto sales have led to an increase in the estimated
under-age 18 declined by 1 percent (+780K), while the number of vehicles per household in the U.S. again, as well
adult population grew by 8 percent (+19.2M). Historically
14
as growth in the percentage of households with 3 or more
accident frequency declines as the age of the driver vehicles available (see Figure 10).17 Historically, a key
increases – data from the National Safety Council from proxy for likely vehicle accident exposure was the number
CY 2003 to 2014 shows drivers aged 25-34 consistently of miles driven per vehicle. With overall miles driven
account for the largest percent of accident counts per per household roughly flat to down per the U.S. Census
licensed driver counts annually (see Figure 9).15 And Bureau’s 2017 National Household Travel Survey, despite
while teens have historically also had very high accident increases in vehicles and licensed drivers per household,
rates, the sheer number of teenagers in the U.S. has fallen this would suggest a key factor driving vehicle accident
steadily. With more growth in the sheer number of older
16
frequency in the U.S. has returned to pre-recession levels.18
drivers and fewer younger drivers, that should temper auto
claim frequency furtherAccidents
in the future.
per Licensed Drivers by Driver Vehicle Age CY2004, CY2009, CY2015
National Safety Council “Licensed drivers and number in crashes by age of driver, United States”
Figure 9: Accidents per Licensed Drivers by Driver Vehicle Age CY2004, CY2009, CY2015
National Safety Council “Licensed drivers and number in crashes by age of driver, United States”
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
19 and under 20-24 25-34 35-44 45-54 55-64 65-74 75 and over Total
CY2004 CY2009 CY2015 Source: National Safety Council: Injury Facts 1990-2017
Figure 10: National Household Travel Survey - Major Travel Indicators per Survey Year CY1969-CY2017
U.S. Census Bureau, 2017 National Household Travel Survey
Travel Indicator CY1969 CY1977 CY1983 CY1990 CY1995 CY2001 CY2009 CY2017
Persons per Household 3.16 2.83 2.69 2.56 2.63 2.58 2.5 2.55
Vehicles per Household 1.16 1.59 1.68 1.77 1.78 1.89 1.86 1.88
Licensed drivers per Household 1.65 1.69 1.72 1.75 1.78 1.77 1.88 1.89
Vehicles per Licensed Driver 0.7 0.94 0.98 1.01 1 1.06 0.99 1
Workers per Household 1.21 1.23 1.21 1.27 1.33 1.35 1.34 1.33
Vehicles per Worker 0.96 1.29 1.39 1.4 1.34 1.39 1.39 1.42
Average Annual Miles per
8685 10006 10536 13125 13476 13827 12888 11621
Licensed Driver (Self-Estimate)
8
Source: U.S. Census Bureau, 2017 National Household Travel SurveyAnother key finding of the 2017 National Household appears to be driven by the higher frequency of purchases
Travel Survey was an overall decline in the reported trips delivered to the household (see Figures 11 A-B).19
taken for ‘shopping and errands,’ which at least in part
Figure 11A: Share of Annual Number of Person Trips per Person by Trip Purpose
100%
90%
24.9% 23.1% 25.1% 27.5%
27.5%
80%
70% 8.2%
8.7% 9.2% 9.6%
10.9%
60%
50%
42.6%
40% 42.2% 41.4% 42.5% 38.4%
30%
20%
2.4% 2.9% 1.6%
1.1% 3.0%
10% 15.3% 16.4% 17.4%
14.9% 15.6%
0%
CY1990 CY1995 CY2001 CY2009 CY2017
To or From Work Work Related Business Shopping and Errands School/Church Social and Recreational Other
Figure 11B: NHTS Average Number of On-Line Purchases and Deliveries to
U.S. Households in the Last Month
8
7
6
5
4
3
2
1
0
All Households Households Without Households With Households With
Members Aged < 21 Members Aged 5-15 Members Aged 16-21
2009 National Household Travel Survey 2017 National Household Travel Survey
Source: 2017 National Household Travel Survey, p. 35, Table 10a. And P. 100 Table 35. https://nhts.ornl.gov/assets/2017_nhts_summary_travel_trends.pdf.
9Millennials in particular have helped drive e-commerce
sales with survey data from CouponFollow reporting 60
percent of them now shop online (see Figures 12A-B).20
Figure 12A: Where Do Millennials Shop
2017 vs. 2019
Figure 12B: All Digital, All the Time
Source: “CouponFollow Millennial Shopping Report 2019.” www.couponfollow.com/research.
10E-commerce sales in the U.S. have grown steadily, as According to ATRI’s “E-commerce Impacts on the Trucking
Figure 13 from Mary Meeker’s annual Internet Trends Industry” there were nearly 2,000 more establishments,
reveals.21 In turn, the U.S. continues to see experience and 85,000 new employees, engaged as courier and
growth in overall truck tonnage (see Figure 14),22 and messenger services in 2017 than there were in 2007,
growth in the number of jobs created within the and a significant portion (74 percent) of these new jobs
trucking industry. were added in 2016 and 2017 alone as e-commerce and
omnichannel retailing trends gained momentum.23
Figure 13: E- Commerce Sales vs. Y/Y Growth, USA
Source: BOND Internet Trends 2019. Mary Meeker, June 11 @ Code 2019. P. 18.
Figure 14: Truck Tonnage (TRUCKD11)
Source: U.S. Bureau of Transportation Statistics, Truck Tonnage [TRUCKD11], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series, June 14, 2019.
11A higher share of individuals who work at home also is primarily differences in economics not preferences that
likely a culprit – the number of workers aged 16 years or have led to the delay in life choices by Millennials versus
older whose primary means of transportation to work prior generations. The question ultimately becomes how
was ‘worked at home’ grew from 3.6 percent in 2005 to new factors such as more online shopping, greater digital
5.1 percent in CY 2017, while those that used a ‘car, truck, capabilities enabling more work-from-home, an aging
or van (alone or in carpool)’ dropped from 87.7 percent in population, and higher rates of migration to the West and
2005 to 85.8 percent in CY 2017 (see Figure 10).24 South will drive auto claim frequency in the future. These
are trends we will continue to monitor moving forward.
Analysis of the demographics of age then suggest that the Many of these demographic shifts have been in place for
anticipated drop in auto claim frequency from Millennials many years already and will continue to evolve with time.
staying put in urban areas and using ride-hailing only Most however are large scale, slow moving, so businesses
instead of purchasing their own vehicle may not actually have time to adapt their marketing, sales, and service
happen after all. Numerous studies reveal that it is plans accordingly.
1. Kristen Bialik and Richard Fry. “Millennial Life: How young adulthood today compares with prior generations.” February 14, 2019. Pew Research Center.
2. Fry, Richard. “Millennials projected to overtake Baby Boomers as America’s largest generation.” March 1, 2018. https://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-baby-boomers/.
3. Sivak, Michael and Schoettle, Michael. University of Michigan Transportation Research Institute. "Recent Decreases in Proportion of Persons with a Drivers' License Across All Age Groups." Report UMTRI-2016-4,
January 2016, Table 1 "Licensed Drivers as a percentage of their age-group population." 2016 data sourced: USDOT FWHA Highway Statistics 2016; Distribution of Licensed Drivers - 2016, Sept 2017, Table DL-20
“By Sex and Percentage in each Age Group and Relation to Population”.
4. Kurz, Christopher, Geng Li, and Daniel J. Vine (2018). “Are Millennials Different?,” Finance and Economics Discussion Series 2018-080. Washington: Board of Governors of the Federal Reserve System, https://doi.
org/10.17016/FEDS.2018.080.
5. Christopher R. Knittel and Elizabeth Murphy. “Generational Trends in Vehicle Ownership and Use: Are Millennials Any Different?” MIT Center for Energy and Environmental Policy Research.
CEEPR WP 2019-006. April 2019
6. Source: Experian Automotive Quarterly Briefing, First Quarter 2019, p. 27.
7. III Quarterly PC Industry Snapshot, Published April 12, 2019.
8. https://fred.stlouisfed.org/series/M12MTVUSM227NFWA.
9. https://www.brookings.edu/blog/the-avenue/2018/03/26/us-population-disperses-to-suburbs-exurbs-rural-areas-and-middle-of-the-country-metros/.
10. https://www.brookings.edu/blog/the-avenue/2018/12/21/us-population-growth-hits-80-year-low-capping-off-a-year-of-demographic-stagnation/.
11. Ibid.
12. US DOT FHWA Office of Highway Policy Information Travel Monitoring. U.S. DOT.
13. https://www.brookings.edu/blog/the-avenue/2018/12/21/us-population-growth-hits-80-year-low-capping-off-a-year-of-demographic-stagnation/.
14. Ibid.
15. Source: National Safety Council: Injury Facts® 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015.
16. https://www.brookings.edu/blog/the-avenue/2018/12/21/us-population-growth-hits-80-year-low-capping-off-a-year-of-demographic-stagnation/.
17. 2017 National Household Travel Survey. https://nhts.ornl.gov/assets/2017_nhts_summary_travel_trends.pdf, p. 60. Table 17. Trends in the Number and Percent of Households by Availability of Household Vehicles
(Thousands). NOTE: Two thirds of the households in the United States have one or two vehicles available, according to the 2017 NHTS. Statistically, the number of households with zero vehicles or two vehicles
remained about the same. On the other hand, the number of households with one vehicle and three or more vehicles were significantly higher in 2017 compared to the 2009 estimates. The estimate of the
number of households with three or more vehicles rose significantly between 2009 and 2017, from 25.7 million households to 28.9 million households in 2017.
18. Ibid., p. 9. Table 2a. Major Travel Indicators by Survey Year.
19. Ibid., 35 and p. 100. Table 10a. Trends in the Share of Annual Number of Person Trips per Person by Trip Purpose and Table 35. Average Number of On-Line Purchases and Deliveries to U.S. Households in the
Last Month.
20. CouponFollow Millennial Shopping Report 2019.” www.couponfollow.com/research.
21. BOND Internet Trends 2019. Mary Meeker, June 11 @ Code 2019. P. 18.
22. U.S. Bureau of Transportation Statistics, Truck Tonnage [TRUCKD11], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/TRUCKD11, June 14, 2019.
23. Alan Hooper and Dan Murray, American Transportation Research Institute. “E-Commerce Impacts on the Trucking Industry.” Arlington, VA., February 2019. P. 23.
24. U.S. Census Bureau, 2017 American Community Survey 1-Year Estimates. https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_17_1YR_B08141&prodType=table. B08141
“Means of Transportation to Work by Vehicles Available. Universe: Workers 16 Years and over in households.”
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