When they hit campuses in the 1960s, they changed education, politics, and pop culture. Frank Sinatra gave way to Crosby Stills, Nash & Young. Segregation gave way to integration. And university enrollment grew at rates never seen before or since.
When they hit the work force, they drove up labor participation rates twice. Once because so many kids were becoming adults, transitioning from student to employee. Second because so many of those kids were enlightened females who were likely to take jobs rather than stay home to bake. The percentage of women working went up as baby boomers came of age.
When they formed families in the 1970s, their demand for housing drove up home prices. People got rich just building homes and speculating on their prices.
And now, when those baby boomers are retiring at a rate of 10,000 a day, workforce participation is dropping again. Baby boomers are the pig on the python, the big bulge in the population that distorts everything each time they enter a new phase of life.
In the graph above, you can see two things. For one, as they came of age, civilian labor rate participation rose and is now falling. Two, as they came of age, they drove up home prices. Home prices took their first real fall only as these baby boomers began to retire and downsize.
Labor participation rate has fallen in part because of the Great Recession and our slow recovery from it. But the Great Recession hit in part because of falling labor participation rates that are simply a function of aging baby boomers.
The baby boom has become a senior bust. The ripple effect of this generational bulge is not over yet.