Are Millennials Different?

Summary

This Federal Reserve Board Finance and Economics Discussion Series paper (2018-080) by Kurz, Li, and Vine compares millennials with earlier US generations at the same ages, using the Survey of Consumer Finances and other data. Its balance-sheet comparisons are the standard US reference for cohort differences in wealth and homeownership.

Key Findings

1. Less wealth at the same age. "Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth."
2. Homeownership collapsed across cohorts. Among young households, homeownership "was near 50 percent for Generation X members in 2001 and only 34 percent for millennials in 2016" (p. 15).
3. Net worth ran far behind. Average real millennial net worth in 2016 was about $92,000 — "around 20 percent less than baby boomer households in 1989 and nearly 40 percent less than Generation X households in 2001" (p. 16).
4. Not a preference shift. "Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations" — the gap is circumstances (prices, incomes, the 2007–09 recession), not taste.

Honest Caveats

The 2016 snapshot partly reflects millennials entering working life around the 2007–09 recession, so some of the gap could close as the cohort ages; the authors also note millennials held more retirement savings than earlier cohorts at comparable ages. The paper measures housing assets, not land separately — the land share of the gap is an interpretation layered on top, not a finding of the paper.

Bears On

• Outcome: The young are increasingly locked out of land wealth

See Also

• Corlett & Judge — Home Affront (UK counterpart)
• OECD — Under Pressure: The Squeezed Middle Class
• Unearned Increment

Sources

1. Christopher Kurz, Geng Li & Daniel J. Vine (2018), "Are Millennials Different?," FEDS 2018-080, Federal Reserve Board, https://doi.org/10.17016/FEDS.2018.080 — used for the cohort homeownership rates (50% vs 34%), the net-worth comparison, and the finding that consumption preferences are unchanged conditional on circumstances. PDF