Skip to main content

Millennial Generation: Information on the Economic Status of Millennial Households Compared to Previous Generations

Abstract: Recent research indicates that, across three key measures, economic mobility in the United States is limited. Specifically, the Millennial generation (those born between 1982 and 2000) might not have the same opportunity as previous generations had to fare better economically than their parents. According to studies GAO reviewed, the share of people making more money than their parents at the same age (absolute mobility) has declined over the last 40 years, and the chances of moving up the income distribution (relative mobility) have been flat over time. Using a third measure of economic mobility (intergenerational income elasticity), researchers have found that income in adulthood is linked to how much a person's parents made, and that between one-third and two-thirds of economic status is passed down from parents to children. This is especially true of the lowest and highest income groups. Researchers also identified race and geography as key determinants of an individual's economic mobility.

Millennials have different financial circumstances than Generation X (born 1965-1981) and Baby Boomers (born 1946-1964), and in light of flat or declining economic mobility, there is uncertainty about how they will fare financially as they age. A snapshot of data that allowed GAO to compare Millennials aged 25-34 to the previous two generations at similar ages showed that Millennial households were more likely than other generations to be college-educated; however, incomes have remained flat across the three generations, implying that Millennials have not yet benefited from the potential additional lifetime income earned by college graduates. Millennial households had significantly lower median and average net worth than Generation X households at similar ages, especially among those with low net worth. Median net worth for the lowest quartile of Baby Boomers and Generation X was around zero, but it was substantially negative for Millennials, indicating that debt was greater than assets for the median low net worth Millennial household. Regarding assets, a significantly lower percentage of Millennials owned homes compared to previous generations at similar ages, but had retirement resources at rates comparable to Generation X and Baby Boomers. Finally, Millennials were more likely to have student loan debt that exceeded their annual income. It remains to be seen how these factors will affect Millennials' financial circumstances in the long run, including retirement.

Beware of the Employer: Financial Incentives for Employees May Fail to Prolong Old Age Employment

PLUS Borrowing in Texas: Repayment Expectations, Experience, and Hindsight by Minority-Serving Institution Status

Dynamic Incentives in Retirement Earnings-Replacement Benefits

The Retirement Migration Puzzle in China

Poverty Reduction Among Older People Through Pensions: A Comparative Analysis

Assessing the Impact of Financial Education Programs: A Quantitative Model

The Risk of Financial Hardship in Retirement: A Cohort Analysis

Financial Distress among the Elderly: Bankruptcy Reform and the Financial Crisis

Mortgage Foreclosures and Older Americans: A Decade after the Great Recession

Paying it Back: Real-World Debt Service Trends and Implications for Retirement Planning

Is Rising Household Debt Affecting Retirement Decisions?

Financial Well-Being of State and Local Government Retirees in North Carolina

Elder Financial Abuse: Fiduciary Law and Economics

Social Determinants Status and Hypertension: Results from the China Hypertension Survey

Is Mutual Fund Family Retirement Money Smart?

Understanding Debt in the Older Population

Optimal Default Retirement Saving Policies: Theory and Evidence from OregonSaves