How Young Adults Imagine Their Economic Future
We utilize the Panel Study of Income Dynamics (PSID), a nationally representative sample of individuals living in American families. In particular, we rely on the Child Development Supplement (CDS), a random sample of 3,563 PSID family children, ages 0-12, and the PSDI’s Transition to Adulthood (TTA) module, which includes these children when they are ages 18 to 22 in 2005, and a few years older in 2007.
We utilize three measures to understand economic optimism during transition to adulthood, including how often a young adult worries about their economic future, how often they worry about money, and how likely they think that they will actually end up in the job they most want at age 30.
Our preliminary findings support our proposition that the socioeconomic status of respondents during middle childhood (ages 6-12) is significantly related to expressions of economic optimism, and that this effect is mediated by respondents’ sense of community belonging. Young women display less economic optimism than their male counterparts. These results are robust to controls that include respondents’ socio-demographic characteristics, psychological dispositions and current financial responsibility and debt. One’s family’s socio-economic background matters for how one imagines their economic future when they reach adulthood in that cultural and economic capital build a sense of economic resilience. However, our results also point to possible drawbacks of high-end concerted cultivation of well-to-do children as these children seem to grow up less optimistic that they can actually achieve economic positions that they wish to have.