Wealth Inequality among Young Adults during the Great Recession of 2008

• In Event: 424 - Section on Economic Sociology Paper Session. Economic Inequality in Wealth, Assets, and Credit

Abstract

The Great Recession of 2008 depleted the wealth of many Americans; communities of color experienced the brunt of the crisis. The image of the recession, however, has been largely focused on those later in the life course who may have lost a great deal in assets. How did the wealth status of young adults coming into adulthood fare during the Great Recession? Using data from the National Longitudinal Study of Adolescent Health collected between 1994 and 2009, this study examines the wealth profiles of youth transitioning to adulthood with data from the Great Recession (2007-2009). The results indicate that young Black adults are the most vulnerable in wealth status and financial resiliency during the recession. Education level and parental class background explains very little of this disparity. For Latinos, educational inequality is an important mechanism through which Latino/white wealth inequality persists. Education overwhelmingly explains the differences in assets, debt, and home payments between Latinos and whites. For Asians, immigrant generation and education helps explain their higher levels of assets. Finally, the intergenerational transfer of wealth through family assistance with paying for a home plays a decisive role in maintaining financial security for young adults during the Great Recession. The paper concludes by discussing the importance of these findings for understanding recessional effects on wealth inequality for young adults across ethnoracial groups.

Authors

• Radha Modi, University of Pennsylvania

• Abigail A. Sewell, Emory University