For the young, these long-term changes include delayed entry into the labor market and delays in marriage—two markers of adulthood traditionally linked to income growth and wealth accumulation. Today’s young adults also start out in life more burdened by college loans than their same-aged peers were in past decades, as documented in a recent Pew Research report. At the same time, growing numbers are in college, and college education has been found to confer a significant financial payoff over the course of a lifetime.
Another change is that, compared with young adults in the past, today’s young adults are more likely to be minorities and more likely to be single parents. These characteristics have been linked with lower economic well-being. However, more young women are working than used to be the case, and many young women are postponing childbearing, with its associated costs.
Economic Well-being over Time
The report does not track the well-being of the same set of households as they age over time. Thus, the analysis does not shed light on the economic mobility or progress of any particular group of households as their heads of household aged.
The major findings of this report provide estimates of the wealth of US households in 1984, 2005 and 2009 and income of US households in 1967 to 2010. Households are grouped by the age of the head of the household in the survey year. The wealth of households headed, for example, by adults younger than 35 in 2009 (born in 1975 or later) are then compared with the wealth and income of households headed by adults younger than 35 in 1984 (born in 1950 or later). Similarly, the wealth and income of households headed by adults 65 and older in 2009 (born in 1944 or earlier) are compared with the wealth and income of households headed by adults 65 and older in 1984 (born in 1919 or earlier). The composition of the households being compared over time may differ on other demographic characteristics of the household head, such as race, ethnicity, nativity and education level.
For older Americans, one key change over the past quarter century has been an increase in the share who are employed. The share of adults ages 65 and older who are employed reached an historic low of 10% in 1985 but has since risen to 16% in 2010. Meantime, older adults continue to have the advantage of inflation-indexed Social Security as the anchor of their annual income streams. Today, as in 1984, on average Social Security accounts for 55% of the annual income of households headed by adults ages 65 and older.
Older Americans also have been the beneficiaries of good timing, in the form of the long run-up in home values that enabled them to accumulate wealth via home equity. Most of today’s older homeowners got into the housing market long ago, at “pre-bubble” prices — half purchased their present homes before 1986, according to the 2009 American Housing Survey. Along with everyone else, they’ve been hurt by the housing market collapse of recent years, but over the long haul, most have seen their home equity rise. Moreover, most older homeowners (65%) do not have a mortgage to pay.
For young adults who are in the beginning stages of wealth accumulation, there has been no such luck, at least so far. Among those who are homeowners, many bought as the bubble was inflating. When the bubble burst, many were left with negative equity in their homes.
Wealth Trends
alth is the sum of all assets (house, car, savings account, 401(k) account, etc.) minus the sum of all debts (home mortgages, car loan, student loan, credit card debt, etc.) of everyone living in the household. People typically accumulate wealth as they age, so large age-based disparities on this measure are to be expected. However, the current gap is the largest in the 25 years that the government has been collecting this data.
The widening of the age-based wealth gap hinges mainly on housing, which is the cornerstone of most households’ wealth.
Compared with their same-aged counterparts a quarter-century ago, today’s households headed by adults ages 65 and older are more likely to own a home (79% in 2009 versus 73% in 1984). Overall, older households had 57% more median equity in their homes in 2009 than did households headed by older adults in 1984. Home equity represented a larger share of mean total wealth for older households in 2009 (44%) than for older households in 1984 (39%).
By contrast, households headed by adults younger than 35 had less housing wealth in 2009 than did households headed by younger adults in 1984. These household heads are slightly less likely to be homeowners (38% in 2009 versus 40% in 1984), and home equity plays a smaller role in their overall wealth (31% in 2009 versus 46% in 1984).
Read the rest of the report at the Pew Research Center.
Pages: 1 · 2
More Articles
- November 1, 2023 Chair Jerome Powell’s Press Conference on Employment and Inflation
- National Institutes of Health: Common Misconceptions About Vitamins and Minerals
- From the Frick Madison Museum Archive: Giovanni Battista Moroni's Portrait of a Woman
- Kaiser Health News Research Roundup: Pan-Coronavirus Vaccine; Long Covid; Supplemental Vitamin D; Cell Movement
- How They Did It: Tampa Bay Times Reporters Expose High Airborne Lead Levels at Florida Recycling Factory
- Department of Justice Issues Annual Report to Congress on its Work to Combat Elder Fraud and Abuse
- Federal Reserve Issues A Federal Open Market Committee Statement: Committee Will Aim to Achieve Inflation Moderately Above 2% For Some Time
- Biden-Harris Administration Marks Anniversary of Americans with Disabilities Act and Announces Resources to Support Individuals with Long COVID, Increased Access to Democracy for Voters with Disabilities
- Coronavirus Aid, Relief, and Economic Security Act; Chair Jerome H. Powell Before the Committee on Financial Services, House of Representatives
- Jo Freeman Reviews Stories from Trailblazing Women Lawyers: Lives in the Law by Jill Norgren