Young men aren't working as much as they used to — and they have less financial freedom than previous generations
- 25-year-olds were less likely to be working full-time in 2021 than previous generations.
- That's driven by men working less than they did four decades ago.
Americans in their mid-twenties are less likely to be working full-time — and to be financially independent — than their previous generations at the same age.
That's according to 1980 decennial census data and a new Pew Research analysis of the 2021 American Community Survey of over three million US households.
66% of 25-year-olds in 2021 were working full-time, down from 73% of 25-year-olds in 1980. 60% had "financial independence," which Pew defined as an income of at least 150% of the poverty level. This was down from 63% in 1980.
Broken down by gender, data indicates men have driven these changes.
Four decades ago, 85% of 25-year-old men were working full-time. In 2021, it was 71%. Financial independence among this group declined from 77% in 1980 to 64% in 2021.
Women have fared better. 61% of 25-year-old women were working full-time in 2021 — in line with the 61% that did so in 1980. Financial independence among this group rose from 50% in 1980 to 56% in 2021, suggesting that more young women have found their way into higher-paying professions.
25-year-olds aren't the only men who are working at a lower rate than they used to. In 1980, roughly 94% of men aged 25 to 54 were working or looking for work, but this has steadily fallen to 89.1% as of March. The decline of men's labor force participation over the last four decades has been driven by working-age men without a four-year college degree, according to a Boston Fed study from last year.
The Pew and Boston Fed research underscore a broader trend of men reevaluating their relationships with work, as people have done widely since the pandemic started. In particular, the Boston Fed found that young men without college degrees left the workforce due to disillusionment of their salary prospects over time, also disheartened by how those prospects reflected on their social status and marriageability.
Men without a college degree have seen their real earnings fall by 30% since 1980, compared to those of all prime-age workers between the ages of 25 and 54. Automation, and the offshoring of jobs in industries like manufacturing, have worked against men as well. Factors, like disabilities or becoming a stay-at-home dad, have kept others out of the workforce.
Even men earning six figures are trying to work less. A recent paper from the National Bureau of Economic Research found that highly-educated high-earners have been clocking fewer hours at their jobs over the last few years.
As women's educational attainment has gone up, and marriage and birth rates have gone down, there's been a surge of women of all ages entering the workforce over the past four decades. In April, the share of US women aged 25 and 54 working or looking for work rose to 77.5%, the highest level on record.
"The bar for what it takes to make a lot of money is moving up"
It's unclear exactly why a smaller share of 25-year-olds are working and financially independent than they used to be.
While the pandemic caused the US unemployment rate to spike to nearly 15% in 2020, it fell considerably by 2021, suggesting this wasn't a big factor keeping young men on the sidelines.
Some men might be enrolled in graduate school. As of 2021, 14.3% of Americans aged 25 and older had obtained a graduate or professional degree, up from 10.9% in 2021.
"This narrative of 'education doesn't pay' is just not true," Jason Schenker, president of Prestige Economics, an economic forecaster, told Insider in December.
"For people in the 60s and 70s, if you graduated high school, you made it," he said. "80s 90s, college, you made it. Now you need grad school for that, but you need college for that. The bar for what it takes to make a lot of money is moving up as jobs require more."
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