Millenials are ignoring the critical steps to wealth and financial stability, according to new research by the American Enterprise Institute and the Institute for Family Studies. Researchers Wendy Wang and W. Bradford Wilcox found that getting married prior to having children rather than having children first lead to markedly different economic fortunes among Millenials.
“In other words, even though transitions to adulthood have become much more complex in recent decades, the most financially successful young adults today continue to be those who put marriage before the baby carriage,” the study’s summary reads.
The researchers studied Millenials born between 1980 and 1984–the oldest members of the Millenial generation–using a survey conducted between 2013 and 2014.
Of those studied, about 55 percent of Millenials between the ages of 28 and 34 had children prior to getting married. That compares to about a quarter of Baby Boomers who became parents prior to marriage at the same ages between 1957 and 1964.
Wang and Wilcox determined that following the “Success Sequence” leads to financial stability. The sequence, first named by Brookings Institute researchers, requires completing high school, finding work, getting married, and then having children–in that order. Among those surveyed, as individuals complete steps on the sequence, the percentage of Millenials in poverty decreased. Thirty-one percent of those studied remained in poverty after graduating from high school. That number dropped to 16 percent once the individuals found full-time work. The percentage of those in poverty dropped to 3 percent for those who married without having children first.
Millenials who marry before having kids are having the most financial success. Of Millenials who married first, 36 percent earn middle incomes by the time they reach adulthood. Half of those in are in the top third of income distribution. Half of those who had a baby first without tying the knot are in the bottom third of income distribution. Those who are married and childless had the highest family incomes. Millenials who have children outside of wedlock were the least likely to be in the top tiers of income distribution. Twenty-eight percent of those studied who had children before marriage are in poverty compared to 5 percent of their peers who married first.
Researchers concluded that policy makers and civic leaders should work to make the success sequence attainable and valued.
“Among other things, this should include public and private efforts to strengthen career and technical education, expand the EITC or other wage subsidies, and publicize the value of the ‘success sequence’ to adolescents and young adults across America.”
Read the study here.