The Recession Gap: A Look At How Older And Younger Millennials Were Affected By The Recession

For years, marketers have classified 18-35 year olds as “Millennials,” because they share similar characteristics. However, there is value in segmenting this generation further into older (27-35) and younger (18-26) Millennials when looking at financial attitudes, as this generation experienced the recession and, thus, its effects in vastly different ways. Though all Millennials were affected in some way by the recession, younger Millennials, compared to older Millennials at the same life stage, have been more substantively impacted in several ways.

Younger Millennials are more likely to have student loan debt and are less likely to be employed than previous generations.

Since 2010, the share of young Millennials ages 18 to 24 currently employed (54%) has been its lowest since the government began collecting data in 1948. And the gap in employment between the young and all working-age adults—roughly 15 percentage points—is the widest in recorded history. On top of being less likely to currently be employed, young Millennials are also more likely to have student debt. Today, approximately 40% of young households hold student debt compared to around one-third in 2007.



Younger Millennials are more likely to live at home.

Though many Millennials returned to their parents’ homes to recover from recession effects, such as delayed entry into the workforce or job loss, the Boomerang trend is predominantly concentrated to the younger portion of the generation. In a proprietary quantitative study conducted by Slingshot in early 2013 among 250 Millennials, we found that younger Millennials (13%) are more likely to be currently living with their parents than older Millennials (8%) were at the same age. 

Younger Millennials are not purchasing big-ticket items such as a cars or houses.

Because older Millennials came into adulthood prior to the recession, they were able to make significant equity purchases at a younger age. Unlike their counterparts, younger Millennials are delaying big-ticket purchase items such as buying a car or a house. Our research indicates that only 45% of younger Millennials have purchased a car (new or used), while 68% of older Millennials had done so at the same age. In addition, 44% of younger Millennials currently report they have help from their parents paying for their car vs. 29% of the older Millennials at the same age. When it comes to owning a house, 16% of older Millennials had one by age 25 vs. only 10% of younger Millennials. 

Based on our research it is clear that younger Millennials (age 18-26) have been hit significantly harder by the effects of the recession than older Millennials (27-35). Fully 64% of the older group admit that those coming of age now have it worse than they did. Thus, it is no surprise that younger Millennials are more considered consumers, 69% report trying to cut spending on what they don’t need. Of note is also how younger vs. older Millennials define what is a necessity vs. a luxury. In our research we asked Millennials in both age ranges to identify an item they saw as a necessity that others might see as a luxury.  We found that younger Millennials are more likely to consider technology purchases and intangible experiences that foster connectivity as necessities. 

“My iPhone with a fully loaded plan is a necessity because I need to be connected 24-7. I want to stay up-to-date and I definitely don’t want to miss anything.”

“Entertainment. I allow some money per month for going out, being social and enjoying life- I can’t live without that.”

While older Millennials were more likely to note health-related items or specific traditional luxury items as necessities they couldn’t live without. 

“Organic food and a health club membership; it’s critical for my health.”

 “I like to travel internationally and will sacrifice other things to these trips.”

As marketers, we believe it will be critical to track the differences in financial attitudes and behaviors of these two groups well into the future, as it is likely that their different experiences with the recession will affect their attitudes in both the short- and long-term. If differences in their behavior and attitudes remain or further diverge, it could even lead to a reclassification of this generation into two distinct groups. 

In addition, to continual monitoring of these groups, we have a few specific things we plan to keep in mind when targeting younger Millennials vs. their older counterparts that we’d suggest you consider as well:

  • They will likely delay their purchase of big ticket items and often evaluate if they need them at all because financing is harder to get or they simply feel more comfortable waiting until they have more of an emergency fund saved -- which means the traditional markers of success are likely to evolve. 

  • They define necessity and luxury very differently than prior generations and consider technology (both devices and data plans/internet connections) at the top of the list of things they won’t cut. 

  • They aren’t ashamed about actively seeking deals or using coupons and are unlikely to make a purchase until they make sure they are getting the best price. 

  • They are more likely to seek educational tools related to finance and consider building a secure future a top priority. 
5 comments about "The Recession Gap: A Look At How Older And Younger Millennials Were Affected By The Recession".
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  1. Erik Sass from none, April 22, 2013 at 4:10 p.m.

    Boy that is depressing reading, especially since it echoes the situation of many younger Millennials of my acquaintance. Worse yet is the fact that a long period of unemployment or underemployment at the beginning of a career tends to impede professional development in the long term, i.e., it will be a handicap for the rest of their working lives.

  2. Zachary Cochran from CPXi, April 22, 2013 at 5:47 p.m.

    Seems pretty accurate to me. I'm definitely in the "younger millennial" batch, as a 24 year-old. I've been meaning to buy a new Mac since December 2010, but just haven't yet been able to replace my now 7 year-old MacBook Pro.

  3. Kristen Berry-Owen from GolinHarris, April 22, 2013 at 5:48 p.m.

    Hard to take the younger millennial plight seriously when they're prioritizing iphones and "money per month for going out, being social and enjoying life."

    The differences between these subgroups seem life-stage and behaviorally based, which may not reflect their unified or disparate value systems. We'll know more when the youngest millennial is over 25.

    Life stage can make someone less enthused about a smartphone and more focused on healthy food. And, as for recession-based hardship, I doubt 25 - 35 year olds have had an easy past five years. It seems like it'd be more difficult to lose a job and house at 32 while married with a baby than to have to move back in with mom and dad post college while working shifts at the Gap or Starbucks.

    Most consumer research indicates that everyone is looking for a deal and heading to sources like these days. And, although it's anecdotal/qualitative, krazycouponlady was started by older millennials, whereas Caitlin Ellsworth (aka Glamourista16) is a younger millennial raking in bucks with haul videos. What unifies these examples is the value of collectiveness/sharing/openness. So, although the focus may be different (and I'd argue that it's based on life stage), the underlying value is similar.

  4. Ro O'Brien from Military Marketing LLC, April 22, 2013 at 6:35 p.m.

    Wow. Eye-opening. Well, I am very grateful to be helping brands with their initiatives in the "military" space. So many of these negative issues do not apply. They are more educated than their civilian counterparts, they are enrolled for college and advanced degrees, they are gainfully employed, they're getting promoted, they are travelling, buying cars, getting married, starting families, and still doing all the things that people their age have always done. And with intl. activities winding down they are coming home with pockets of non-taxable cash that they are spending on all kinds of things.

  5. LLoyd Berry from Moving In Media, April 22, 2013 at 7:13 p.m.

    It breaks a point that is being missed that this demo used to be a very powerful with the brands and advertisers alike.

    Let me explain, there is a show called Vegas its had 11 to 12 Million views in at 10 p.m time slot on Thursdays and the network wanted to cancel it because the metric that watch its was 45 and older... Think about it 11MM people watched the show and the network wanted to cancel it.

    Millennials who have went to college and have loans and are starting a family are not cash rich by any means. If you living with mom and dad, well that says it all doesn't it...

    Its only the generation of boomers who do have the cash to spend. Yet the agencies or brands are doing nothing to gain and capture this market. They seem to think they can get them from other marketing initiatives. Think about it every 7 seconds someone turns 60 and going to alive on average 30 more year and uses all the tools of technology like any other human on the planet.

    Look at this way, this year I watch a famous car auction and the only people who were buying $30K to $300k cars where all of boomer generation. The place the young millennials hope to get there down payments from come from this very generation. . .

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