Many Gen Zers are teetering on the edge of economic security in their 20s. Here's why it's such a 'decisive decade.'

Researchers are calling ages 14-24 the ‘decisive decade.’ Gen Zers’ teenage and young adult years could determine their financial future. Maskot / Getty Images

• Gen Z’s ‘decisive decade’ of 14 to 24 years can significantly impact their socioeconomic future.
• Educational attainment and mental health can shape young adults’ fortunes.
• Gen Zers outcomes also depend on factors like family income level, gender, and race.

Gen Zers are in their teenage and young adult years and it’ll shape their fortunes for decades to come.

The generation — who are between the ages of 12 and 27 according to the Pew Research Center’s definition — grew up alongside evolving technology, major elections, and the pandemic. Now, they are getting driver’s licenses, attending graduation ceremonies, decorating first apartments, and starting new jobs.

The ages of 14 to 24, specifically, are what researchers are calling the “decisive decade.” According to an April report from the Brookings Institution, Gen Zers’ life circumstances during those years can have significant impacts on their socioeconomic future.

America is already seeing a split among Gen Zers — those who are getting degrees and beginning careers, and “disconnected youth” who are not enrolled in school or working, a cohort that includes about 14% of 18-to-24-year-olds.

Many young people are feeling anxious about adulthood. And there are three key reasons Gen Zers’ decisive decade will shape their ongoing mental and financial health.

Education has a major impact on future employment

Educational attainment will inform Gen Zers’ future income levels, the Brookings report found, because college graduates tend to land higher-paying jobs.

Based on data from the Census Bureau’s Annual Social and Economic Supplement, the report looked at Americans’ education and employment milestones between ages 14 and 24.

Just 31% of young people had a bachelor’s degree or higher by age 24, while 58% worked full time between 2015 and 2019, even before the pandemic disrupted work and school patterns for millions of Americans. The researchers also noted that about there were about 2.5 million fewer high school graduates enrolled in college in 2022 compared to 2010.

This growing disconnection with education and the workforce correlates to future income. Urban Institute, a research firm, found that a 10% increase in the share of time a young adult spends disconnected is associated with a $7,000 – $9,000 decrease in family income by the time they turn 30.

“If we empower more young people who have within their own lives, they’re quite capable of making strong decisions within this period that can have lifelong benefit,” Ian Rowe, a senior fellow at the nonprofit policy research firm American Enterprise Institute, said at an April 29 Brookings event.

Continued education has other benefits too, researchers found: lower rates of teen pregnancy, substance abuse, homelessness, and criminal justice involvement, as well as improved mental health levels.

Unhappiness can shape long-term mental health

Gen Zer’s mental health outcomes are shaped by their involvement in school and work, Brookings researchers said. And, the generation is increasingly feeling the weight of isolation and financial stress.

At work, many Gen Zers are struggling with anxiety, work-life balance, and burnout — more so than millennials, Gen X, and boomers. Unhappiness and social isolation are especially affecting Gen Zers who reached adolescence during the pandemic. And it’s hurting their happiness levels.

In the 2024 World Happiness Report, young adults in the US reported some of the lowest levels of life satisfaction in years, ranking 62nd out of 143 countries for people under 30.

“Happiness, well-being and greater mental health is predictive of a whole bunch of positive outcomes,” Lara Aknin, an editor at the World Happiness Report, said at the Brookings event. “Graduating from high school is a meaningful milestone, but it’s also satisfaction with your relationship and earnings later on.”

Additionally, Brookings found that more young people are living with their parents than previous generations. This trend tends to alleviate some mental health risks and reduce adult poverty levels.

Gen Zers’ choice to live in multigenerational households is also a strategy to alleviate financial stress, especially as many young people face staggering student loan costs, rising home prices, and growing inflation levels. 40% of young adults living with their parents cite financial reasons, per 2022 Pew Research Center data.

Not all Gen Zers start on equal footing

To be sure, Gen Zers’ education, work, and financial outcomes are also dependent on their life circumstances in childhood. Brookings researchers reported that family income level, gender, and race can also determine young people’s futures.

Students who come from low-income backgrounds are less likely to enroll in college, the report found: 89% of students who grew up in the top income quintile enroll in higher education, compared with 51% of those from lowest income quintile.

21-year-olds from top-quintile families are also twice as likely to have met major milestones like graduating from high school and being enrolled in college than those from bottom-quintile families.

These trends also vary depending on a young adult’s gender and race, researchers said. Women who are disconnected during their “decisive” ages of 16 to 24 are four times more likely to become young mothers than those who are working or enrolled in school.

Black and Hispanic young adults are also more likely to be disconnected. About a fifth of Black and Hispanic 24-year-olds aren’t working or employed, compared to 14% of white and Asian 24-year-olds, the report found.

Are you a Gen Zer who isn’t employed or enrolled in school? Are you a parent of disconnected youths? Reach out to this reporter at [email protected].

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