A Generation Indebted? Young Adult Debt across Three Cohorts

Jason N. Houle, University of Wisconsin-Madison

Popular reports—stoked by the Great Recession and rising college costs—contend that young adults today are more indebted than the generations that precede them, but little systematic research exists on patterns of indebtedness in young adulthood. This study examines how young adult indebtedness has changed across three cohorts of young adults in the 1970’s, 1980’s, and 2000’s. To do this, I pool data from four National Longitudinal Surveys of Youth—the NLS-M 1966 cohort, NLS-W 1968 cohort, NLSY 1979 cohort, and NLSY 1997 cohort. Study findings reveal that the proportion of young adults with debt and median indebtedness is relatively stable across the three cohorts of study, in contrast to popular notions of rising young adult debt. Debt burden (e.g. debt-to-asset ratio), however, has increased across cohorts in part because of declines in asset ownership and increases in unsecured debt among young adults. Implications of findings are discussed.