As generational research has grown in popularity in recent years, so have the criticisms. Some concerns are legitimate, but many are not.
When looking at generational research, it’s important to know the difference between age and cohort effects. Age effects are changes stemming from someone’s stage of life, but cohort effects are views and behaviors specific to a generation that remain constant over time; cohort effects should be the focus of good generational research.
We discovered a number of misconceptions about cohort effects and Gen Z research while writing our Gen Z report, which is a comprehensive study based on over two years of research in 11 countries. Here are a few myth-busters:
Misconception: Gen Zers will outgrow their behaviors
Reality: This generation is different
A common objection to Gen Z research is that these teens and young adults will become like their parents as they age. Yes, they will change, especially as they earn more, have families, or buy homes, but this generation is different.
They are the first digital natives and were impacted by COVID-19, social upheaval, and other trauma at a much more impressionable age than older generations. As a result, they are exhibiting certain behaviors that other generations didn’t, even at the same age. For example, Gen Zers in the United States are 45% more likely to invest than millennials were at age 21, and 2.2 times and 4 times more likely to invest than Gen Xers and boomers were at this age, respectively, according to our surveys.
Gen Zers also are the most educated generation, so far. They are 10% more likely to attend college than millennials and 33% more likely than Gen Xers were at the same age, according to the Pew Research Center. These and other behaviors will remain different over time and could have an enormous impact on the financial well-being of Generation Z.
Misconception: Gen Z trends are not global
Reality: Our Gen Z findings are consistent across multiple countries and specific demographics
Another criticism we often hear is that generational research is too generalized and doesn’t account for individual differences within generations. While individual differences matter, our report identifies trends that are broadly true for most Gen Zers across many dimensions. We found that Gen Zers in the 11 countries we surveyed are more likely than other generations to have side hustles, want brands to interact with them on TikTok, and purchase from social media ads. For example, 45% of middle and high-income Gen Zers in the United States have side hustles, and 40% of low and middle-income Gen Zers in Mexico also have side hustles. On the other hand, 36% of middle and high-income Gen Zers in Canada want brands to interact with them on TikTok, and 35% of low and middle-income Gen Zers in Brazil also want brands to interact them on TikTok.
Gen Z trends also stay consistent in the United States when looking at region, gender, and employment status. Gen Zers across these dimensions are more likely than other generations to pay extra for brands that support causes they care about, use TikTok to make purchases, and be disloyal to their “go-to” brands. For example, across all regions in the United States, Gen Z is about 15% more likely than other generations to pay extra for brands that support causes they care about. Within a few percentage points, the same holds for other demographic segmentations such as gender and employment type. This consistency shows that these Gen Z traits are likely not overly generalized; they are traits that distinguish Gen Z as a generation.
Misconception: Gen Z trends will change in an economic downturn
Reality: Nope, they keep job hopping and side hustling
Many expected Gen Zers to quit job hopping if the economy slowed, but that’s not the case. Our longitudinal data shows these behaviors are persisting. The percentage of United States and United Kingdom Gen Zers who are looking for jobs has stayed steady at 62% under better market conditions (in September 2022, with US GDP growth at approximately 3%) and at 64% under worse economic conditions (in February 2023, with US GDP growth at approximately 1%).
Similarly, Gen Zers keep side hustling, no matter the macroeconomic conditions. In November 2022, under better market conditions, 49% of Gen Zers in the United States and United Kingdom had side hustles. In February 2023, under worse economic conditions, 54% of Gen Zers in the United States and United Kingdom continued side hustling.
High quality generational research isolates cohort effects and identifies real differences between generations. We don’t have a crystal ball, but our longitudinal data suggests that these Gen Z trends will persist over time and disrupt our workplaces, markets, and beyond.
Simon Luong and Ariana Mao contributed to this article.