11:52
It's Valentine's Day. Love is in the air. Restaurants are fully booked. Flower prices have mysteriously doubled overnight. And yet, you're here watching an economics video. So, what happened? Because statistically speaking, there's a decent chance you're not celebrating tonight. At least not in the traditional sense. 30 years ago, nearly 7 in 10 American adults were married. Today, it's barely five. At the same time, almost one in three households now consists of just one person, the highest share ever recorded. On the surface, that sounds like progress. The fact that millions of people can support themselves financially would have been unthinkable just a few generations ago,
especially for women and in cities. So, in many ways, it's a win. But something unexpected happened along the way. Modern economies weren't built for this many people living on their own. They were designed around the assumption that most adults live in shared households. And while that assumption is breaking down, the system isn't adapting gracefully. It's just getting more expensive. For example, living alone doesn't mean using less space in proportion to your income. It means absorbing the full cost yourself. The same is true for insurance, emergencies, and the countless small shocks that couples quietly divide without thinking about it. These extra costs create what
people are now colloquially referring to as the single tax. It's not a formal policy, but the accumulated premium of navigating an economy that still assumes two people are sharing the load. In New York, for example, living alone costs the average renter over $20,000 more per year than sharing an apartment. not for better housing, but for the same square footage, paid solo, which points to a deeper problem. As the cost of living alone rises, the line between being single and being lonely starts to blur. When money is tight, a social life becomes harder to sustain. Dating starts to feel like a financial risk, and isolation can creep in without anyone consciously choosing it. So, today, on the most romantic day of the
year, we're not going to talk about love. We're going to talk about economics. And we'll start, as always, with three important questions. Why has singlehood risen so quickly? Why does being single cost so much more in modern economies? And when does living alone stop being a sign of freedom and start becoming a serious economic problem? Almost 80% of people quit their New Year's resolutions by February. But this is often not where the real change comes from. It comes from small, consistent habits that create growth over time. In 2026, here at Economics Explained, we are making sure we upload four times per month. And so far, we are making that work.
Your mental health is no different. I take a walk every day for my mental health, but sometimes that's not enough. That is why BetterHelp is the sponsor of today's video. BetterHelp is an online platform that provides licensed therapists that have qualified knowledge and training to help support you and your mental well-being. It's more cost-ffective and can be tailored to your timetable, so you can always make time for self-improvement. You'll be paired with a therapist after answering a few questions, and you can switch at no additional cost if you want to seek a better connection with another therapist. By using the link in the description to register, you'll receive
not only a 10% discount on your first month with BetterHelp, you'll also be supporting this channel at no additional expense to you. For most of the late 19th and 20th centuries, being in a couple wasn't just about love. Daily life depended on shared income and shared labor. One person earned wages, another handled unpaid work at home, and together they covered costs that were difficult to carry alone. Housing, credit, and long-term security were easier to access as part of a household than as an individual. So living alone, although not impossible, was hard, and that was especially true for women. In 1950, only about 1 in three women in the US participated in the labor force. For
most, earning a stable income outside the home simply wasn't an option. But that began to change in the second half of the 20th century. As women entered the workforce at scale and gained access to their own income, partnerships stopped being a requirement for economic survival and became increasingly a choice. At the same time, the internet replaced many of the practical functions relationships once provided. Once you could get groceries delivered, stream entertainment, and even find emotional support online, life became easier to manage alone. There was less pressure to formalize a relationship early, so people started marrying later or not at all. And as a consequence, birth rates
fell. In the US, the fertility rate has dropped from around 3.6 children per woman in the early 1960s to about 1.7 today. Across Europe, most countries now sit well below replacement level. And in recent years, places like South Korea and Japan have recorded some of the lowest birth rates ever measured. The result is visible almost everywhere. In rich countries, especially in large cities, living alone has gone from rare to normal in just a few decades. Oneperson households now make up nearly half of all homes in Manhattan and over 50% of households in cities such as Stockholm and London. What once signaled isolation increasingly signals a steady income, autonomy, and the ability to
manage daily life independently. Seen this way, the rise of singlehood isn't a sign that societies are breaking down. It's a consequence of economic progress. But here's the problem. While people adapted quickly to this new reality, economic systems didn't. Housing markets, tax codes, benefits, and workplace policies still quietly assume that adulthood comes with a built-in second person, creating what we know as the single tax. Housing is one of the areas where that penalty becomes impossible to ignore. Most apartments are still designed and priced with two adults in mind. If you arrive alone, nothing adjusts. You don't get a discount because you only sleep on one side of the bed. You're paying for a twoerson setup, whether there are two
people in it or not. That's why single renters spend roughly $7,100 more per year on average than people who live with a partner. And in high-cost cities like New York, that gap can easily climb to $20,000 a year. You get the same apartment location and square footage. But there are just fewer people to divide the bill. Over time, this doesn't just affect individuals, but reshapes the housing market, too. As more people live alone, demand shifts towards studios and onebedrooms. Supply, however, still reflects shared households, which results in more and more residents competing for the same limited pool of small apartments. This causes the rental market to become more expensive overall with the sharpest pressure landing on singles because
they're already paying a loan. And once you notice the single tax and housing, you start seeing it everywhere. Groceries are a good example. Larger package sizes are on average about 30% cheaper per unit, which is a great deal until you're the only one doing the eating. A family pack of chicken might cost less per pound, but if you live alone, buying it means freezing and meal planning or wasting half of it. The single serve version costs more per pound, but at least it gets eaten. Either way, you've just paid extra for the privilege of eating alone. The same logic shows up with utilities, subscriptions, transportation, and maintenance. Take transportation. The average annual cost of owning a car in the US is now over $12,000 a year,
including insurance, gas, and repairs. That figure barely changes whether one person drives the car or two, which means singles carry the full cost while couples can split it if they share a vehicle. Utilities work the same way. Heating an apartment or keeping the lights on doesn't cost half as much just because there's only one person inside. In fact, single person households consume nearly three times as much heating energy per capita as multi-person households. And the reason is design. Most residential buildings, floor plans, and heating systems are still engineered around a standard household of four people. When only one person lives there, those systems don't scale down. Heating zones are too large,
ventilation is oversized, and entire rooms get warmed even when no one is home. As a result, roughly 40% of heating energy in single person households is effectively wasted, with the cost landing on one person instead of being shared. And beyond the monthly bills, being single also means missing out on benefits that offer greater advantages if someone else is in the picture. Health insurance is a clear example. If one partner has a job that offers coverage, the other can usually be added at a relatively small extra cost. In the US, employer sponsored family plans now average over $25,000 a year in total premiums, but most workers only pay about $6,300 of that themselves, with employers picking up the rest. A single person buying
insurance on their own doesn't get that deal. On the individual market, premiums can easily run around $8,000 a year without access to the kind of employer subsidy couples can tap into through a partner's job. The same happens with retirement benefits, paid leave, and even education. Married workers can qualify for spouse or social security benefits worth up to half their partner's payout. Universities often extend tuition discounts or even full rides to employees, spouses, and children, sometimes covering 50 to 100% of the cost of a degree. But those options simply don't exist if there's no partner in the picture. And if having a more
expensive life and being locked out of entire categories of economic support weren't enough, single people also tend to earn less on average. In 2019, partnered men took home a median income of about $57,000. Single men earned closer to $36,000. For women, the gap was smaller, but still real. Roughly $40,000 for those with a partner compared to $32,000 for those without. All this feeds back into how people live. When housing takes a bigger share of income, and everyday life gets more expensive, a person's social life is usually the first thing to shrink. dining out happens less often and drinks turn into a maybe, especially among younger and lower income adults
who are the same groups that are most likely to be single. Add to this the fact that since 2020, the basic cost of going on a date has risen sharply. Food away from home is up nearly 8% year-over-year, with full service restaurant costs rising even faster. Concert tickets that once sat comfortably under $100 now often average over 120. Even before you meet anyone, creating the opportunity itself comes with a price. Premium dating app subscriptions now routinely run $40 to $50 a month just to improve your chances of forming a connection. Put it together and the cost becomes hard to ignore. A casual date now lands in the $70 to $80 range. Do that a few times a month at events, transportation, and app fees. And dating quickly turns into a hundreds
of dollars a month luxury. Surveys suggest people often go on 10 to 20 dates before committing to a relationship. At today's prices, that can mean spending well over $1,000 just to find out whether something is going anywhere. It's true that none of this makes dating impossible, but it does change how people approach it. When you're already paying the single tax on rent, utilities, and insurance, dating stops feeling spontaneous. You go out less often and think a little longer before saying yes. And over time, that financial caution narrows opportunities. So rising costs aren't just making the single life more expensive. They're quietly reducing the conditions that make partnerships easier to form. And
oddly enough, that works just fine for the economy, at least for now. At first glance, rising solo living can look like an economic win because more households mean more demand and more spending per person. But that logic only holds as long as independence doesn't slide into isolation. Because the moment living alone turns into loneliness, the economics start to flip. Despite the singles tax, places with large numbers of people living alone can still show economic growth as long as people remain socially connected. Regular interaction keeps ideas moving, helps workers find the right jobs, and sustains the everyday trust modern economies rely on.
Loneliness, by contrast, has the opposite effect, leading to lower productivity, worse health outcomes, and higher public spending. In the US alone, loneliness costs the economy $460 billion a year, even before factoring in broader productivity losses. So, in the end, what matters is whether solitude stays social. Living alone does not automatically mean being lonely. In fact, some of the countries with the highest shares of solo households are also the ones where people report the strongest social support, which helps explain why solo living hasn't dragged down growth in those countries. But that balance doesn't hold everywhere. In China, for example, living alone is rising faster than
social connection can adapt, turning independence into isolation in many cases. Today, China already has well over 100 million one-person households. And by some estimates, that number could climb close to 200 million by 2030. Much of that increase is driven by rapid aging. But a growing share now comes from younger urban adults living alone as well, often far from family and with weaker day-to-day social support. That reality has created an entire economy around living alone. From solo dining restaurants and a booming pet market to apps that fill gaps in care, monitoring, and social contact. One of the most popular and widely downloaded apps is called Shyame, which loosely translated means, "Are you dead?" The app does exactly one
thing. Users press a button each day to confirm they're alive. If they don't, it alerts an emergency contact. Shame went viral because it reflected something many people recognized. That living alone, especially over time, can mean fewer routine check-ins, looser social ties, and longer stretches without being noticed. But it's easy to draw the wrong conclusion from that. Rising singlehood doesn't mean people stopped wanting connection. In fact, most singles still say they believe in love and they expect to find it.
It's true that love now has more hurdles to clear, but the desire for relationships is there, especially among younger adults, many of whom are actively looking for a partner. Which brings us back to Valentine's Day. If you're watching this solo, congratulations. You're statistically normal. And that's kind of the point. Being single isn't bad, and couples aren't the only lives worth designing an economy around. The problem is that our systems still assume life comes with a second person by default and quietly penalize you when it doesn't. In the end, this isn't really a story about romance. It's about whether our economies are built for the way people actually live now and whether independence can stay empowering without
slowly turning into isolation. On Valentine's Day of all days, that's an economic question worth asking. Now, if dating and family formation keep getting harder, fewer relationships turn into long-term partnerships, and fewer partnerships mean fewer babies. That matters because modern economies still depend on new generations to work, pay taxes, and support aging societies. So, it's no surprise that many governments have landed on a simple idea. If people aren't having kids, why not just pay them to do it? But as it turns out, that approach doesn't work the way policymakers hope. And in some cases, it creates entirely new problems. If you want to see why paying people to have babies might be a billion dollar
mistake, we made an entire video breaking that down. You should be able to click to that video on your screen now. Thanks for watching, mate. Bye.
