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Millennials entered adulthood with unusually good reasons to be pessimistic. The global financial crisis destroyed jobs just as many joined the labour market, wages stagnated in several rich countries and soaring house prices pushed ownership further out of reach. Their frustration helped energise anti-establishment movements on the left and made permanent economic disappointment seem like a defining feature of the generation.

That picture is now badly out of date. Across most rich countries, millennials in their 30s and 40s have higher real incomes than earlier generations did at the same age. They are catching up in home-ownership, accumulating wealth quickly and taking control of companies, governments and cultural institutions. A cohort once treated as an emblem of economic failure has become one of middle age’s winners.

Recovery after a punishing start

The improvement is broad, though not universal. The Economist assembled income data for 32 wealthy countries and found that millennials were worse off than their predecessors at the same age in only three: Italy, Greece and Japan. Each has suffered an unusually long economic malaise. Italian millennials earned about 10% less at age 30 than Gen-Xers had; Greek incomes still bear the scars of the debt crisis; and Japanese households have endured decades of weak growth since the country’s asset bubble burst.

In the other 29 countries, millennials have surpassed earlier cohorts. Progress has been modest in Australia, Britain and France, where they gained little on Generation X. But it has accelerated in places ranging from America to Poland. The result does not erase the hardship of the 2010s. It shows instead how strongly economic outcomes depend on the stage of the business cycle at which a generation reaches adulthood.

Millennials were hit especially hard by the financial crisis because younger workers tend to be dismissed first in a recession. Today’s labour market is almost the reverse. Employment across the rich world is close to historic highs, and in Greece nearly four-fifths of people aged 35 to 44 are now working. Sustained employment and rising wages have allowed the generation to rebuild its finances during its prime earning years.

Demography turns into an advantage

Population ageing has strengthened millennials’ position. After the financial crisis, many baby-boomers delayed retirement while they repaired their savings, leaving fewer senior jobs open. The pandemic then accelerated retirements; one American study estimated that there were 3m more retirees than expected by late 2022. Meanwhile, working-age populations are shrinking in ten of the OECD’s 38 member countries.

That scarcity increases the value of experienced workers in their 30s and 40s. Millennials are now as likely to be managers in America as Gen-Xers were at the same age. They also occupy many of the most powerful posts in technology, including leadership at major artificial-intelligence companies, and their share of American billionaires is more than twice Generation X’s share in 2011. Even politics is becoming less gerontocratic as the cohort gains seats in legislatures and leads more governments.

The shift also changes the politics of generational grievance. Many millennials may retain the left-wing sympathies formed during their leaner years, but redistributionist politics no longer maps as neatly onto their own economic position. Increasingly, they are the managers, owners and decision-makers whom such politics scrutinises.

Housing catches up, inheritance lies ahead

Housing remains the strongest case for millennial disadvantage, but here too the gap has narrowed with age. Only about 40% of American millennials owned homes at 30, well below the comparable rate for Generation X. Among the oldest millennials, now in their 40s, ownership has caught up completely. In Britain the generation was about 20 percentage points behind its predecessors at 30, but had halved that deficit by 40.

Part of the explanation is delayed rather than permanently blocked ownership. As the economy improved, older millennials had more time to build deposits and repay student debt, while some governments loosened mortgage rules. Longer education and later marriage also postponed the need for a family home. Strikingly, the richest young Americans have much lower home-ownership rates than equally affluent people did in earlier generations, suggesting that preference and timing matter alongside affordability.

Millennial wealth is now rising faster than that of previous cohorts at the same age. The next boost will come from inheritance. Bequests are already worth roughly 10% of annual GDP across the rich world. Britain’s Institute for Fiscal Studies estimates that the median inheritance for people born in the 1980s will be about £136,000 in today’s money, more than twice the amount expected by those born in the 1960s.

The emerging generational problem may therefore belong less to millennials than to Generation Z. Younger workers could face disruption as millennial managers adopt labour-saving artificial intelligence, while the older cohort benefits from stronger careers, appreciating assets and inherited wealth. Millennials did not imagine their difficult beginning, but neither should their early hardship be mistaken for their permanent economic fate. Their delayed recovery has arrived, and much of the rich world’s economy is now theirs to shape.