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The State of Young Adults’ Balance Sheets: Evidence from the Survey of Consumer Finances

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Abstract

The authors investigate recent trends in the financial circumstances of young adults using data from the triennial Survey of Consumer Finances (SCF) from 2001 to 2013. They examine trends in young adults? net worth, break down the composition into specific assets and liabilities, and describe young adults? experiences with credit markets. The analysis focuses on three main comparisons: (i) trends over time (ii) between young adults and older adults and (iii) between young adults in 2013 (members of the ?Millennial Generation?) and young adults in 1989 (members of ?Generation X?). They find that between 2001 and 2013, young adults experienced a decline in net worth, driven largely by declines in asset holdings. The median young adult in 2013 also had lower net worth than the median young adult surveyed in the 1989 SCF. Despite media attention surrounding the Millennial Generation?s relatively poor economic outcomes during the Great Recession, young adults in the SCF have fared better on many measures than both current older adults and earlier young adults. Compared with older adults, young adults experienced a relatively modest decline in net worth, particularly during the Great Recession. Young adults in 2013 were also more likely than young adults in 1989 to own homes, stocks, and retirement accounts, and they were less likely to have very high debt payment-to-income ratios than their counterparts in 2001 and 1989 or older adults in 2013.

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  • Lisa J. Dettling & Joanne W. Hsu, 2014. "The State of Young Adults’ Balance Sheets: Evidence from the Survey of Consumer Finances," Review, Federal Reserve Bank of St. Louis, vol. 96(4), pages 305-330.
    • Handle: RePEc:fip:fedlrv:00030
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    1. Dettling, Lisa J. & Hsu, Joanne W., 2018. "Returning to the nest: Debt and parental co-residence among young adults," Labour Economics, Elsevier, vol. 54(C), pages 225-236.
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    Cited by:

    1. Miguel Faria-e-Castro & Samuel Jordan-Wood, 2024. "Pandemic Labor Force Participation and Net Worth Fluctuations," Review, Federal Reserve Bank of St. Louis, vol. 106(1), pages 40-58, January.
    2. Sebastian Devlin-Foltz & John Edward Sabelhaus, 2015. "Heterogeneity in Economic Shocks and Household Spending," Finance and Economics Discussion Series 2015-49, Board of Governors of the Federal Reserve System (U.S.).
    3. Till von Wachter, 2020. "The Persistent Effects of Initial Labor Market Conditions for Young Adults and Their Sources," Journal of Economic Perspectives, American Economic Association, vol. 34(4), pages 168-194, Fall.
    4. Lisa Dettling, 2016. "Effects of entering adulthood during a recession," IZA World of Labor, Institute of Labor Economics (IZA), pages 242-242, April.
    5. Lisa J. Dettling & Sarena Goodman & Sarah Reber, 2022. "Saving and Wealth Accumulation among Student Loan Borrowers: Implications for Retirement Preparedness," Finance and Economics Discussion Series 2022-019, Board of Governors of the Federal Reserve System (U.S.).
    6. Lisa J. Dettling & Sebastian Devlin-Foltz & Jacob Krimmel & Sarah Pack & Jeffrey P. Thompson, 2015. "Comparing Micro and Macro Sources for Household Accounts in the United States: Evidence from the Survey of Consumer Finances," Finance and Economics Discussion Series 2015-86, Board of Governors of the Federal Reserve System (U.S.).
    7. Marx, Magali & Mojon, Benoît & Velde, François R., 2021. "Why have interest rates fallen far below the return on capital?," Journal of Monetary Economics, Elsevier, vol. 124(S), pages 57-76.
    8. Daniel Bergstresser & Randolph Cohen, 2015. "Changing Patterns in Household Ownership of Municipal Debt: Evidence from the 1989-2013 Surveys of Consumer Finances," Working Papers 87, Brandeis University, Department of Economics and International Business School.
    9. Christopher J. Kurz & Geng Li & Daniel J. Vine, 2018. "Are Millennials Different?," Finance and Economics Discussion Series 2018-080, Board of Governors of the Federal Reserve System (U.S.).
    10. Dettling, Lisa J. & Hsu, Joanne W., 2018. "Returning to the nest: Debt and parental co-residence among young adults," Labour Economics, Elsevier, vol. 54(C), pages 225-236.
    11. Jesse Bricker & Kevin B. Moore & Jeffrey P. Thompson, 2019. "Trends in household portfolio composition," Working Papers 19-9, Federal Reserve Bank of Boston.

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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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