Millennials under Water: Victims of Finance Capital

• In Event: 432 - Section on Aging and the Life Course Paper Session. Changes in the Timing of Life Course Transitions in Young Adulthood: Taking Longer, Maybe Never

Abstract

Stagnant incomes in combination with continuing pressures for consumption have created a paradox for many Americans that is being resolved by increased use of credit and the resulting emergence of a new debt society. Those coming of age in the first decade of the 2000s, commonly called the millennials, are important carriers of this new reality because of their early career stage that leaves them with many needs, such as education and housing for family formation, but few resources of accumulated wealth or high earnings. Using data from the Survey of Consumer Finances across the last 20 years we contrast the debt experiences of the millennials with the experience of prior cohorts. The millennials both took on more credit earlier in their careers and retrenched more quickly and dramatically than prior cohorts since the onset of the Great Recession in 2008. Within this cohort, the expansion of a debt society occurred significantly through the expansion of credit to those of lesser means. Conversely, young people with the greatest financial resources used debt more selectively and with apparently fewer risks and negative consequences.

Authors

• Randy Hodson, The Ohio State University

• Michael David Nau, The Ohio State University