The On the Economy blog will periodically rerun blog posts that were of particular interest. The following is the second post in a two-part series from January 2019 on the relationship between balance sheets and marital status among young adult households.
Among young adults (ages 25-34), married households typically are wealthier than either single households or partnered households. Homeownership appears to play a large role in this gap. But these groups of young households also differ in terms of their student loan balances and shares.
In a recent issue of In the Balance, Visiting Scholar Fenaba Addo and Lead Analyst Lowell Ricketts noted that the median age at first marriage has risen over the past few decades:
They also noted that the share of unmarried partnered households rose over the same period. While the share of married households dropped from around 57 percent in 1989 to 37 percent in 2016, the share of partnered households rose from about 7 percent to 21 percent.
Addo and Ricketts explained that this shifting share of married versus unmarried young households is also associated with changing debt compositions of households. “This shift is most pronounced when examining the rise of student loan debt,” they wrote.
Among all young adults, the share of households with debt attributed to student loans has risen over time. The authors noted that:
Addo and Ricketts also looked at the share with student debt by marital status, as shown in the figure below.
For single households, the share that held student loan debt rose from 17 percent in 1989 to 45 percent in 2016. Student loan debt went from being the fourth most commonly held debt—behind credit card, auto and housing debt—in 1989 to the most commonly held by 2010, the authors noted.
Similar to single households, partnered households saw their share holding student loan debt rise significantly, going from 10 percent of households in 1989 to 50 percent in 2016. Only the share holding credit card debt was higher, at 54 percent.
While married households also saw their share holding student loan debt rise (from about 15 percent to 46 percent over this period), the authors noted that it remained the fourth most commonly held form of debt, continuing to be behind credit card, housing and auto debt.
The authors pointed out that the median student loan debt among married households ($10,400) in 2016 was most similar to that of partnered households ($7,900). However, the overall median net worth among married households was more than three times larger. Among single households, the median student loan debt in 2016 was $20,000.
“[O]n aggregate young adult households were particularly impacted during the Great Recession,” Addo and Ricketts concluded. “It has been, however, a specific subset of young adult households, unmarried young adults (single and partnered), whose balance sheets continue to look particularly vulnerable 10 years after the economic downturn.”
