The impact of the Great Recession on Generation X

For people born in the 1960s and 1970s, sometimes known as Generation X, the Great Recession (GR) was the first major economic downturn that they have experienced. Using the 30+ year record of the Longitudinal Study of American Life (LSAL), this analysis examines the economic impact of the GR on an American cohort born in 1972-75 who were in their mid-40s in 2019. A confirmatory factor analysis index was constructed to summarise the economic experience of each LSAL participant in the period from 2007 (the eve of the GR) through 2014. Most of the LSAL participants did not experience negative economic consequences, but a significant subset of participants experienced substantial negative effects. A structural equation model (SEM) was used to estimate the relative influence of several educational and family variables on the nature and magnitude of the GR on employment and related economic issues. Educational attainment was the strongest predictor of the economic impact of the GR on individuals. The educational attainment of the parents of LSAL participants was the second strongest predictor, indicating the inherited advantages of social class. The impact of the GR on participants was unrelated to gender, but African-Americans were more likely to experience negative economic consequences from the GR than other young adults, holding constant differences in educational attainment, parent education attainment and other factors.