Oct 3, 2018

Young Americans expect to make more money than their parents

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Data: Chetty, et al., 2016 "The Fading American Dream: Trends in Absolute Income Mobility Since 1940"; Chart: Andrew Witherspoon/Axios. Inflation adjusted to 2014 dollars.

Half of young Americans, aged 15-26, expect to be better off financially than their parents, and 60% of parents agree with them, according to a new AP-NORC poll.

Why it matters: Only half of 30-year-old Americans in 2014 made more than their parents. Compare that to 1970, when 92% of 30-year-olds made more than their parents, according to a report by economist Raj Chetty. If young Millennials and Gen-Zers today end up making more than their parents, it would be the reversal of a falling trend.

By the numbers:

  • 29% of young people expect to ultimately be in about the same financial situation as their parents, and a quarter of parents feel the same way.
  • 20% of young adults expect to be worse off financially than their parents.
  • 12% of parents surveyed also thought their young adult kids would be worse off financially.

The big picture: Young Americans are increasingly more educated, according to a study by Pew Research, and the average income for 25-34 year olds has generally risen in recent years for both men and women after falling or remaining stagnant during the recession, according to Census data.

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