Are We in a Relationship Recession?
The real issue today isn't that couples don't want kids. It's that young people aren't even coupling up in the first place.
In this episode of the Missing Middle podcast, Sabrina Maddeaux and Mike Moffatt discuss the phenomenon of the 'relationship recession,' exploring its causes, implications for society, and the economic challenges it presents. They delve into how changing social dynamics, economic pressures, and technological advancements are reshaping relationships and family structures, particularly among younger generations. The conversation highlights the impact of these trends on the middle class and the need for policy solutions that address the root causes of declining relationship formation.
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Below is an AI-generated transcript of the Missing Middle podcast which has been lightly edited.
Sabrina Maddeaux: For years, headlines have warned about plummeting birth rates across the developed world. In 2023, Canada hit a record low with just 1.26 children per woman. But, Mike, what if we've only been looking at half of the story? So you know how politicians are always talking about why couples aren't having more kids? Well, it turns out they might be totally missing the point. New analysis from the Financial Times shows the real issue today isn't that couples don't want kids. It's that young people aren't even coupling up in the first place.
We're not just talking about a baby bust anymore. We're talking about what the Financial Times calls a relationship recession. And just like an economic recession, this could reshape our entire society in ways we're only just beginning to understand.
Mike Moffatt: So I got to say like a lot of economists, I tend to think in these kind of oversimplified models of the universe. And when I think about what's happened over the past couple of decades, when it comes to kids and families, I tend to think in terms of delays that, you know, people are staying in school longer, you know, perhaps they're getting a master's degree or PhD. They're entering their workforce later and say they're mid twenties rather than their early twenties or as a teenager.
Then when they're working, the housing crisis means that it's taking longer for couples to be able to afford a family size home. Then when they do, they start to have children. They're having fewer of them because they're starting, you know, many cases in their late thirties and you know, that doesn't give us much time. Now we have more dual income families and those dual income families while it increases income. It also raises the cost of having children because you just don't have an extra person around.
So, you know, naturally I've always recognized that the world's more complicated than that and there's dozens of different factors. But one I hadn't really thought about is the decline in the formation of heterosexual couples, even when you control for all of those other things. Now, as you point out, there's been some articles and studies about this phenomenon recently, including that Financial Times piece, which calls this a relationship recession.
So can you walk me through and walk our listeners through what exactly a relationship recession is?
Sabrina Maddeaux: Of course, so the key is the relationship recession isn't just about young people taking their time to settle down or tie the knot. We're seeing a fundamental shift in whether people couple up at all. So think about this. In the past, when birth rates fell, it was mainly because couples were choosing to have fewer kids. Between 1960 and 1980, the average number of children per woman in the US dropped from four to two, but the percentage of women in relationships only dipped slightly.
Recently, the numbers have actually been pretty steady. So what's really dropped off a cliff is the number of couples themselves. So get this, in the US, if people were still married or moving in together at the same rate as even just a decade ago, we'd actually have a higher birth rate today. So people aren't just staying single a few years more. They're actually staying single or dating casually very long term or even permanently. And on top of that, for those who do couple up, the data isn't great either.
In Finland, which is a country that's often seen as a preview of Western social trends, couples who move in together are actually now more likely to split up than to have a child, which is a complete reversal of historical trends.
Mike Moffatt: Yeah, so we're seeing some really interesting changes in these dynamics. And here at the missing middle, we're big fans of NYU professor Scott Galloway. And he has his own theories about this relationship recession. And he's spoken about it on a number of different platforms. And we'll link to one of his Substack pieces in the show notes. But his thesis incorporates both economic and technological changes. I’ve got to admit, I probably won't do it justice. So you're probably going to want to read this for yourself, but I'm going to do the best I can.
Now his theory or his conjecture is that economic changes have left an increasing number of men behind, which limits their attractiveness to the opposite sex that you have, you know, a larger segment of men who are out of the labor force or not earning very much or in very kind of precarious work. Meanwhile, technology in the form of online dating apps allows both women and men to select from a larger pool of potential partners. That the ocean has gotten a little bit larger. So his theory is that that combination of economic forces and technological forces has created a kind of a winner take all competition where, say, the top 10 or 20 per cent of men - on some scale of overall attractiveness, however you want to define it - they can do really well, but it's leaving the rest largely behind.
I mean, it's an interesting thesis, but like, to be honest, I don't know what to make of it. And I think part of that is just because I'm really old. You know, the last time I was single, like, this was before 9/11, right? So like, you know, we didn't even have smartphones back then. None of these dating apps existed. So I just don't understand this universe at all. I'm a complete stranger to the modern dating world. So, because of that I'd love to get your take on Galloway's economics coupled with technology theory of the relationship recession.
Sabrina Maddeaux: Well, consider yourself lucky you didn't have to deal with dating apps because they're quite awful. But the Financial Times data actually adds such a fascinating twist to what Galloway is talking about. So you're right that he's on to something with technology and economics, but check this out. This isn't just happening in America. It's happening almost everywhere. The places where young people are staying single the most, they line up almost perfectly with where smartphone and social media use exploded first. And that's especially among women.
But it's not just as simple as blaming those awful dating apps. The Financial Times found that the steepest drops in relationship formation are happening in what they call extremely online regions, that being Europe, East Asia, and Latin America. And then you see a smaller decline in the Middle East, then finally followed by Africa. So social media seems to be accelerating the spread of changing values and expectations about relationships, especially among women.
And when you combine this with the economic factors you mentioned, like men falling behind in education and earnings in many countries, you get this perfect storm. But going beyond all that data, what I see personally, younger people are, like I said, really fed up with dating apps. Even people who've met a partner, I know say they absolutely hate them and there is just a consensus they're not working, they're making dating terrible. But there's also the sense that there's really nowhere else to meet people, which then gets into other issues like weakened communities, loss of third spaces, and also just this really restrictive cultural climate surrounding approaching and actually pursuing potential partners.
Mike Moffatt: Yeah. I mean, I can absolutely see that. And again, I have to go back to the 90s, we're not meeting the opposite sex of malls anymore.
Sabrina Maddeaux: Malls, do those even exist anymore?
Mike Moffatt: They really don't. Not in the same way that they used to.
So, we can think about these phenomena, like on an individual level. And again, I might think what would things be like if I was 25-years younger and then trying to put myself in the shoes of those folks. But there's also the more sort of macro level effects, right? And when it comes to these broader issues about relationships and families, I tend to be of two minds about this. On the one hand, my general philosophy is like, live and let live, right? Like, I'm a parent with kids, but I totally understand why people might want different lifestyle choices. And one of those might be a dual income, no kids, couples lifestyles. Where they focus on travel or careers instead of having families. I totally get that. If that's the choice you want to make, I'm not here to judge, but I also wonder if there's another side of the coin to this. The first is how much of that is actually really a choice? Like, for example, I never played major league baseball. I always wanted to. I always grew up wanting to be a Montreal Expos short stop. And that's not going to happen for a variety of different reasons, but that wasn't because I consciously made a choice that I want to be a Think Tank guy and not a Major League Baseball player. Like, I never had that opportunity because of a lack of ability. Right? So I wonder, are people forgoing having kids and entering into these relationships, not because they don't want them, but because of all of these barriers preventing society from that happening?
And then that causes that kind of larger, societal impact to consider, where you have all of these people who would would like to be forming these relationships, like to be having kids, but just simply aren't able to. So, I’d really like to know where you land on this?
Sabrina Maddeaux: It's a really great question, Mike, and it really gets to the heart of what makes this trend so fascinating and also concerning.
So, while we often picture, like you said, educated, high-earning couples choosing to stay child free and enjoy their disposable income, the Financial Times analysis tells a completely different story when it comes to coupling up. So, what they found is that the steepest decline in relationships isn't actually happening among well-off professionals at all. It's happening among people without college degrees, the working class and lower income earners.
And when you pair this with rising rates of loneliness and widespread frustration with dating, especially among younger people, it starts to look a lot less like a story of empowered choice and more like a really troubling social shift. Now, we see politicians - they keep throwing out solutions for fertility issues like child tax credits and baby bonuses to tackle these falling birth rates. But if the real issue is that fewer people are forming relationships in the first place, isn't that like offering dessert before people have even sat down to dinner? Mike, should we be thinking about policies that help people actually find partners and build relationships rather than just incentivizing people who are already couples to have kids?
Mike Moffatt: Yeah, I would tend to agree. You know, I am a fan of things like child tax credits because they help out people financially who need the help, but I don't think they work great as incentives. I don't think people are necessarily having an extra child because of the existence of these things. I tend to be of the belief that policy makers and think tank people like me too immediately go to the incentives side of policy - particularly the cash incentive side - where if there's something that's not happening, if people aren't making the choices that we want them to make, we will give them cash or a tax credit or something to try and change their incentives. And there's a certain economic logic to that, but I'd like to take it a step further where we asked the question:
Why aren't they making those choices in the first place? Like, really understand the barriers, right? And if it's that they just don't want to make those choices, they don't want that outcome, then I don't think we should be incentivizing them. But if they do want to make those choices and there are barriers, right? I think that we should be trying to break down those structural barriers.
Let's take it to a housing example, right? Like instead of going, okay, we're going to give cash to first-time-home-buyers to try and incentivize and buy a home - it's like, well, why do we have so few homes in the first place and why are they so expensive? And let's try and deal with those structural barriers rather than just trying to paper over things with money.
So that's, you know, when I see these kinds of baby bonus things and incentivizing people to have kids, I don't necessarily think it's the right approach. I think we should be trying to understand the structural barriers and deal with those - deal with the underlying causes of the problem, not just deal with the symptoms.
Sabrina Maddeaux: Yeah, that makes complete sense. Now, you know, when we talk about fewer people coupling up, I also have to wonder about the economic ripple effects. So think about it: one income instead of two, single people having to shoulder rent, grocery bills alone in this economy with no real ability to rely on a partner if something bad happens, like if there's a job loss or an illness. So what kind of impact is this quote unquote relationship recession having on people's financial stability? And does it present any broader economic risks?
Mike Moffatt: Yeah, I think it does. You know, coupling basically provides a kind of form of insurance, right? Where, if I'm a single person and I lose my job, my income is absolutely going to crater. Hopefully I'm going to be able to get employment insurance, but that doesn't even cover everyone. I'm going to take a massive financial hit. But if I have a partner who has an income similar to mine and one of us loses their job, you know, our family income might only be declining 20 or 30 per cent after employment insurance. But there is a flip side to it that I want to ask you about that this lack of attainable housing - the disconnect between rents or home prices and incomes - can affect on the other side of it as well, where you can have people who get stuck in relationships and can't afford to move out, right? So they might be in a relationship that's toxic, abusive, or just not a great fit for them. They're like, “But I can't afford to leave.” Do you think that that factors in at all in this relationship recession and how young people consider cohabitation?
Sabrina Maddeaux: Absolutely, because what we're seeing is not just differences in marriage rates, but actually differences in the rates of people moving in and starting new relationships. And the housing crisis is absolutely playing a role in that.
So, I think when housing prices really started to soar, there was initially this idea that…while it's true that if you move in together, then you get to split the rent and the bills, and that can be financially great. But on the flip side of that of you split up - and you know most relationships when you're young, in your 20s especially, don't end in marriage they end in splitting up unfortunately - then you're suddenly stuck maybe paying double the price of rent that you were before when you were single just a couple years ago. So now there's this hesitation that I see among people where if you're thinking about moving in with a partner, well, that's a really big leap of faith because if things don't work out, you might not be able to go back to that one bedroom [apartment]. Instead you might be moving back in with your parents because you can't even afford the rent to move out again. So that seems like a really big risk to take that next relationship leap.
For people who already live together, moving out again, it might be [that] you have to move back in with your parents. Or if you don't have that support system…maybe you're looking at moving into a shelter or staying on a friend's couch, right? Not everyone has that privilege of moving back in with their family. And they end up staying in these potentially toxic situations or just in a situation they don't want to be in. It doesn't even have to be toxic. But then that delays them, perhaps, starting to date again, moving into another relationship. And it may be even once they do get out of that situation [it] makes them even more hesitant to get back into another one. So definitely it snowballs and a lot of it, I do think, comes down to the cost of living and specifically housing affordability. And for younger people that comes down to rental prices mostly.
But I want to shift gears and talk a little bit about how for generations the backbone of the middle class has been couples pooling their resources together, right? So like we talked about splitting the mortgage or rent, sharing the bills, building a life together in general. But if we're heading into this future where people are staying single much longer or maybe not coupling up at all, what does that mean for the middle class as we know it? Are we looking at a fundamental reshape of who can actually afford a middle class lifestyle?
Mike Moffatt: Yeah, I think that's already happening. And again, I think it's unfortunate. And I think it's something that we need to try and solve and fight against. And again, it's, it goes back to choice, right? So it's not about saying that people have to couple up, or creating societal pressures for people to couple up. If you want to be single in your life, you know, you want to just have a one or two bedroom condo, take lots of trips, do whatever you want. That's totally cool. And we should, you know, absolutely, support, that decision. But what changes is when that's not being made a free choice, but rather due to economic and social circumstances. And it does feel like we've moved in that direction. And I really worry about the societal impact of that. You know, Scott Galloway, to bring it back to him, really worries about what that's going to mean for men in particular. If you're going to have all of these angry, single, disaffected men. You know, history shows that that never ends well, right? So I do think we need to create a society where we give people more options and we say: go out and, you know, do what you'd like to do. If you want to become a couple, have kids, that's great. If you want to do something else, that's good too. But ultimately at the end of the day, I think it should be about choice.
We have to realize that economic circumstances affect the choices that are made available. And that choice set has been shrinking for younger middle-class people. We got to figure out how to expand it back out again.
Sabrina Maddeaux: Yeah, you hit the nail on the head, that we saw an expansion of choice for a long time and now I think we're seeing a retraction of it. And it's not necessarily young people choosing not to get into relationships or have kids, it's that they feel they don't even have that option, even though they might desperately want it. So we'll see if politicians start to come to terms with this issue and if we see any innovative policy proposals, especially with the liberal leadership race underway.
Well, thank you everyone so much for watching and listening and also a big thanks to our producer Meredith Martin.
Mike Moffatt: If you have any thoughts or questions about online dating apps, please send us an email to [email protected].
Sabrina Maddeaux: And we'll see you next time.
Some additional reading that informed the episode:
The relationship recession is going global
Why Americans Suddenly Stopped Hanging Out
This podcast is funded by the Neptis Foundation and is brought to you by the Missing Middle Initiative - a think tank housed in the Department of the Environment at the University of Ottawa
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