Study: Are millennials worse off than baby boomers were at the same age?

Millennials are not all worse off than their baby boomer counterparts, a new study from the University of Cambridge found after analyzing major differences in the life trajectories and wealth accumulation of the generations in the U.S. However, a stark and growing wealth gap exists between the two groups.

Millennials are more likely to work in low-paying jobs and live with their parents, researchers found. But "those living more 'typical' middle-class lifestyles often have more wealth than their boomer parents did at the same age," the study, published in the American Journal of Sociology in September 2023, reported.

Lead author of the study, Dr. Rob Gruijters said the debate about whether millennials are worse off is a distraction. "The crucial intergenerational shift has been in how different family and career patterns are rewarded." 

Here’s what else researchers discovered. 

Key findings: Millennials vs. baby boomers 

• By age 35, 17% of baby boomers moved into a prestigious professional careers after graduating college, such as law or medicine, while 7.3% of millennials did the same.  
• Millennials tended to postpone marriage and live with their parents for longer amounts of time. About 27% of boomers got married earlier and became parents early, compared to 13% of millennials. 
• By age 35, 62% of boomers owned homes, while 49% of millennials were homeowners. Around 14% of millennials had negative net worth, compared to 8.7% of baby boomers. 
• About 63% of low-skilled service workers who identified as boomers owned their own home at 35, compared with 42% of millennials in the same occupations.
• The poorest millennials in service sector roles were more likely to have negative net worth, compared to boomers.

"This divergence in financial rewards is exacerbating extreme levels of wealth inequality in the United States," Gruijters said. "Individuals with typical working class careers, like truck drivers or hairdressers, used to be able to buy a home and build a modest level of assets, but this is more difficult for the younger generation.”  

Gruijters said the solutions to addressing these wealth inequalities include progressive wealth taxation and policies like universal health insurance, giving more people security. 

Baby boomers have the largest net worth

Baby boomers own 52.8% of all wealth in the U.S., compared to 5.7% of millennials, according to the Federal Reserve.

How was the data collected? 

Researchers from the University of Cambridge, Humboldt University in Germany and the French research university Sciences Po analyzed work and family life trajectories of more than 6,000 baby boomers and 6,000 millennials in the U.S.

Researchers posed the following questions:

• How does the distribution of household wealth at age 35 differ between millennials and baby boomers? 
• How do early work and family trajectories differ between millennials and baby boomers? 
• How do the wealth returns to different work and family trajectories vary between millennials and baby boomers? 
• To what extent can cohort differences in household wealth be attributed to changes in work and family life courses? 

The study compared late baby boomers (born 1957-64) with early millennials (born 1980-84), using data from the National Longitudinal Survey of Youth.

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