A life course investigation of financial self-reliance and economic pressure in early adulthood.

Abstract

The normative task of becoming financially self-reliant intersects with challenging social and economic conditions making early adulthood a likely time to experience economic pressure. The life course of contemporary cohorts of "emerging adults" can be characterized by multiple paths to adulthood via the ordering and timing of adult roles. Using data from the Youth Development Study (YDS), Eliason, Mortimer, Vuolo, and Tranby (2009) identified five life paths that summarized meaningful role changes from ages 17-30. Each life path had its own distinctive timing of family formation. Building on Eliason et al., this study examined how participants' background variables and life paths were associated with financial self-reliance and economic pressure in early adulthood. Longitudinal data were modeled with latent growth curves. The YDS sample in this study consisted of 732 participants, a cohort born in 1973-1974, originating from public schools in the upper Midwest. On average, financial self-reliance increased from ages 23 to 26 then decreased slightly before increasing again prior to age 31. The average level of economic pressure was moderately high from ages 25-31. Financial self-reliance and economic pressure trajectories were not correlated. Background variables had important selection effects on the life paths of participants. Background variables and the life paths of participants more often influenced initial levels of these financial outcomes rather than their rates of change; however, these initial differences were perpetuated over time. For instance, females experienced greater economic pressure than males at every age. Females were more likely than males to follow life paths that included early parenthood, and from ages 23-26, females in these groups had lower levels of financial self-reliance. The highest academic achievers had higher and more dynamic "up-down-up again" levels of financial self-reliance whereas low academic achievement was associated with lower and flatter monotonic levels of financial self reliance. The life paths of those reporting the highest levels of financial self-reliance included marriage earlier in the life course, but these early parenthood groups felt the most economic pressure.