Family Socialization, Economic Self-Efficacy, and the Attainment of Financial Independence in Early Adulthood

Abstract

The attainment of financial independence is a key marker of the contemporary transition to adulthood.  In this study we ask, how do young adults gain the capacity to support themselves?  We contend that communication about work in the family during adolescence is an essential precursor of economic self-efficacy during adolescence and financial independence in early adulthood.  Drawing upon rich longitudinal data that span adolescence and young adulthood, we first ask whether family communication and socialization practices surrounding work and finances influence the development of ways of thinking about oneself that imply self-reliance and confidence in the economic domain (economic self-efficacy).  Second, we assess whether these components of the family’s economic climate have long-term influences on the transition to adulthood, status attainment, and financial independence. Our findings indicate that direct communications about work with parents foster the development of economic self-efficacy.   This positive dimension of the self-concept fosters achievement during the transition to adulthood (e.g., educational achievement, employment status, and income attainment), which, in turn, heighten financial independence.  In contrast, looking to parents for money during adolescence (that is, receiving a regular allowance) appears to diminish economic self-efficacy and does not promote socioeconomic attainment.