Longitudinal data from before and after the Great Recession reveal its impact on adults in their thirties and forties

According to the authors of a recent paper published in the Journal of Adult Development, much of the research about the financial and psychological impact of the Great Recession of 2008 has focused on young adults, while little research has been done on how established adults (between the ages of 30 and 45) were affected. The paper’s authors, Wang et al., wanted to fill this gap in the literature by examining the financial problems of established adults both before and after the Great Recession. To do so, they analyzed longitudinal data collected in the Family Exchanges Study (FES). Publicly available from the National Archive of Computer Data on Aging (NACDA), the FES interviewed three generations of family members in 2008 and 2013 in order to expand knowledge of intergenerational transfers by addressing the psychological processes underlying family support. The Wave 1 sample was recruited from African American and White respondents aged 40-60 living in Philadelphia and the surrounding counties. Their parents, spouse, and up to three offspring over 18 years of age also were included in the study. The same core respondents were contacted five years later for Wave 2, and updated information was collected for spouses/romantic partners, parents, and up to 4 age-eligible offspring. Survey questions addressed how and why individuals choose between self, spouse, parent, and children, as well as how they choose among multiple parents or step-parents and children in allocation of their time, emotional energy, and material assets.

Wang et al. used both waves of the FES to examine changes in financial problems for established adults before and after the Great Recession. They also investigated the implications for those adults’ depressive symptoms and relationship quality with their parents. Their findings showed that financial problems for FES participants rose between the two waves, going from 16 percent to 72 percent of participants. And 14 percent of participants indicated continuing financial problems, with 33 percent reporting decreased income over the five years between waves. The authors also found that, “Financial problems at baseline, continuing financial problems across the observation period, and decreased income over time were associated with participants’ increased depressive symptoms, after controlling for their baseline depressive symptoms.” Further, “adult participants had more strained relationships with their parents if they experienced more financial problems at the follow-up interview.” The harmful effect of financial problems on relationship quality with parents was partially explained by adult participants’ depressive symptoms.