Cash is alive… and somewhat young? Decoupling age, period and cohort from euro cash use

Understanding the future of the demand for cash calls for an analysis that separates secular trends and age-related behaviours on different cash usage indicators. This article uses data from the 2019, 2022 and 2024 editions of the Eurosystem study on the payment attitudes of consumers in the euro area (SPACE) survey. It applies an age-period-cohort-interaction (APC-I) framework to illuminate patterns in transactional cash use, precautionary cash hoarding and the perceived importance of cash. Our findings reveal significant period effects, including sustained trends (such as a decline in transactional cash use and an increased reported importance of having cash as an available option) and temporary changes (like a post-pandemic peak in cash hoarding). Age effects are a significant factor shaping cash habits: youngest cohorts (18-27) are characterised by a higher propensity to hoard cash than older groups, paired with average transactional cash use. Meanwhile, cash use in everyday transactions is led by older demographics (63-77), while middle-aged cohorts (28-47) tend to use cash less. Cohort analysis reveals that beneath the general rise in the stated importance of cash across all ages, specific birth cohorts exhibit distinct attitudes. Our analysis indicates that cash fulfils enduring, albeit evolving, roles across different demographic groups, particularly for younger people. The article concludes by discussing policy challenges that will need to be addressed to continue fostering a resilient and inclusive payment system that accommodates digital innovation alongside cash. JEL Classification: E41, E42, D12, J10, C31