Unequal Playing Field: Financial Responsibility and Hardship in Emerging Adulthood

Abstract

Financial well-being in emerging adulthood is shaped by early socioeconomic factors, yet disparities in financial responsibility and material hardship remain understudied. This study examines how childhood poverty, family dynamics, and school environments influence financial outcomes among emerging adults, using longitudinal data from the Future Families and Child Wellbeing Study (N = 2824) in the United States. Applying the Emerging Adulthood Theory and the Life Course Perspective, we analyzed financial responsibility and material hardship at age 22. Results revealed that poverty at birth predicted higher financial responsibility and greater material hardship, with male and Black and Hispanic youth disproportionately affected. Gender disparities emerged, as women reported higher hardship despite similar responsibility levels. Youth born into single-parent families reported greater financial responsibility at age 22. In contrast, higher levels of parental involvement and school engagement during childhood were associated with reduced material hardship in emerging adulthood. Findings underscore structural inequities, highlighting the need for policies that address systemic barriers alongside financial interventions. This study advances understanding of how early disadvantage perpetuates financial instability, urging targeted interventions for vulnerable populations.