Special Report: The Family Structure of the Future
The family of the future is growing smaller in size with the average number of children per household dropping across regions, in both developed and emerging economies. Many factors like falling fertility rates, an increasing number of women working, delaying family planning and the increasing cost of raising children are contributing towards the shrinking size of families globally. This will have significant implications on consumer spending patterns and household dwelling structures.
- Families are changing globally with a growing trend towards smaller families. The average number of children globally is forecast to decline to 1.0 per household in 2020, compared to 1.9 per household in 1980. By 2020, with the exception of the Middle East and Africa, all regions globally will have an average number of children of below 2.0 per household.
- Between 1980 and 2020, the biggest decline in the average number of children per household will be in emerging and developing economies, particularly in Asia and Latin America. The average number of children in both regions is expected to reach 1.0 per household by 2020, down from 2.2 and 2.3 per household respectively in 1980;
- Changing consumer lifestyles, declining fertility rates, the increasing number of women focussing on their careers and delaying family planning as well as the increasing cost of raising children is contributing to smaller future families. By 2020, the global fertility rate is forecast to reach 2.8 children born per female compared to 4.5 children born per female in 1980.
- As a result, globally, single person households and couples without children households are forecast to witness the highest growth across households, up by 183% each over the 1980-2020 period to reach 334 million and 358 million households respectively by the end of the period.
- Changing family structures will have significant implications on household spending patterns as well as household dwelling structures. This family of the future will become an important consumer market segment, affecting marketers across product ranges as these households will tend to consume more per person and have more room for discretionary spending (all items except food, non-alcoholic beverages and housing).
Global Households by Type: 1980-2020
Source: Euromonitor International from national statistics
Note: “Other” refers to households of: 1) a single family with other persons (relatives or non-relatives), 2) two or more families with or without other persons (relatives or non-relatives), 3) two or more persons related to each other but none of whom constitute a family nucleus, with or without other unrelated persons, 4) non-related persons only.
Average Number of Children Per Household by Region: 1980-2020
The family of the future impacts household structures
The shrinking size of families globally is changing household structures giving way to not-so-standard household compositions of single-parent families, live-in relationships and non-cohabiting couples:
- The number of single person and couples without children households across regions is rising steadily. Globally, these two household types are forecast to witness the highest growth over the 1980-2020 period, rising by 183% each to reach 334 million and 358 million households respectively. The largest rise in these household types came from Latin America and the Middle East and Africa region;
- The share of single person and couples without children households in the total number of households are also expected to witness the highest increase during this period reaching 15.5% and 16.7% of total households by 2020, up from 12.0% and 12.9% respectively in 1980;
- The share of couples with children households globally is forecast to decline to 42.6% by 2020, from 48.5% in 1980. However, by 2020, this household type will continue to have the largest number of households, at 916 million with a growth of 91.7% over the 1980-2020 period. Eastern and Western Europe are forecast to witness the biggest slowdown in growth of the number of couple with children households, up by only 9.4% and 14.5% respectively over the 1980-2020 period;
- The share of single-parent households is also rising globally, though its share in total households globally has risen only marginally. Over the 1980-2020 period, single-parent households will have grown by 165% to reach 168 million households by 2020 accounting for 7.8% of total households globally, up from 6.4% in 1980. The largest rise in these household types also came from Latin America and the Middle East and Africa region.
Consumer market potential and other implications
- Smaller sized families in the future will enjoy a better standard of living as they tend to consume more per person compared to larger families. These households will possibly have more room for discretionary spending like household goods and services, they may be able to own cars for comfort and they might even spend more on education on their fewer children;
- For example, three-person households had the highest consumer expenditure in China at US$1.1 trillion in 2012, accounting for 39.5% of total consumer expenditure in the country. On a per household spend basis, three and four-person households spent over US$7,500 in 2012 compared to the national average of US$6,672 in the same year;
- Single-person households will become an important consumer segment to be targeted by companies. These households tend to have a steady source of income with no family responsibilities. Young single-person households present a huge market for discretionary items including households goods like electrical appliances, communications like mobile phones and laptops, transport, entertainment and leisure activities;
- There will be a growing focus on education across regions as parents are able to spend more on the education of the fewer children they are bearing. Between 2013 and 2020, India is forecast to witness the highest growth in consumer expenditure on education globally rising by 10.5% in real terms per year compared to the 4.4% real annual growth globally. Click to Tweet!
- A smaller family in the future will disrupt household dwelling structures and can lead to chronic housing shortages, like for example, in the USA or in the UK. This can result in an increase in consumer debt, as homeowners will borrow more to finance their houses.
- Globalisation and ideas of autonomy are driving the emergence of new family formats that will govern family composition over the coming decades. According to the OECD, key factors that will shape the future family landscape include population change, fertility and mortality rates, immigration as well as economic and labour market prospects;
- Longer life expectancies and an ageing population will lead to at least four or five generations in the family at the same time and though not under the same roof, will contribute towards increasing single-person households. On the other hand, there is likely to be a substantial increase in the number of lone parents and many young families are likely to be single-parent households relying on social welfare benefits;
- With slowing global growth and high youth unemployment, family budgets of smaller families may be strained in the near future. In addition, slow reform of social security systems will weigh heavily on these family incomes and budgets;
- According to the OECD, co-habiting couple households, that is couples who choose to live together but not marry, are expected to rise steeply in the future, particularly in developed economies.