Millennial vs. Generation X spending power in South America: Bolivia
Millenials and Generation X
Millennials, those born between 1980 and 2000, are set to become the most influential population segment in terms of spending power over the next 15 to 20 years. This fact was revealed in a Brookings article by World Data Lab analysts. But what about Generation X, those born between 1960 and 1980? How is the generation whose idols include David Bowie and Kurt Cobain doing in comparison to Millennials? In order to shed some light on this question, particularly from the South American point of view, we used Market Pro to explore the real-time income and demographic forecasts for selected countries in South America. Our focus today: Bolivia.
Bolivia is classified by the World Bank as a lower-middle-income country with an annual average spending power of $4,301 (in 2011 PPP). For the purposes of our analysis, the Extremely Poor are those who live on less than $1.90 per day, the Poor segment live on $1.90-$5 a day, the Vulnerable segment live on $5-$11 per day, the Middle Class segment live on $11-$110 per day, and the Rich live on $110 and over.
The next 10 years
Today, roughly 31% of Bolivia’s population is considered poor. Of that number, around 24% are Millennials. Even though poverty in general may decrease in Bolivia by over 12% in the next ten years, the share of Millennials in the poor segment will remain rather constant. This minute, Millennials constitute a segment of around 684,000 people with a daily spending of less than $5 in 2011 Purchasing Power Parity. The same holds true for Generation X except that the proportion of the poor population in this group is 13%, which represents around 570,000. The amount of Bolivians who are part of the vulnerable segment will increase slightly by 80,000 people until 2028. While Millennials account for 31% of this vulnerable group today, this number will decrease to 25% by 2028. A similar development can be seen for members of Generation X whose share in the vulnerable group will decrease from 16% to 11% during the same timeframe meaning that overall, Bolivians are growing wealthier.
While the middle class in Bolivia is expected to grow from 3.9 to 5.6 million people during the next ten years, the trend does not impact Millennials’ share in this income group. Generation X’s representation in the middle class, on the other hand, is expected to increase 21% by 2028.
Most of the growth in wealth will be seen in the rich segment. The number of people in Bolivia’s rich segment will increase by 88% over the next ten years. Generation-wise, Millennials will witness a 65% growth of their numbers in this rich segment, and Generation X’s numbers will increase by 40%. But even though forecasts for Bolivia look strong, if current trends remain the same – the country will not be able to fulfil SDG 1 and lower the amount of its people in the extremely poor segment to beneath 3% of the total population.
Saskia Knecht contributed to this post. Edited by Marta Miko, Baldwin Tong, and Thomas Mitterling.