Sample Research Paper: How Millennials Affect the Economy


The performance of local and global economies relies on various factors including consumer demographic. This factor has a large contribution to the economy since it dictates the market trends and how businesses should adapt to different cultures . Today, the majority of adult consumers, individuals in their 20s and 40s, are millennials. These are individuals who were born between 1981 and 1996 and tend to rely on technology heavily. The cultural gap between millennials and previous generations forces the economy to adapt to a changing world that prioritizes social responsibility, financial literacy, and technology.

Overview of Millennials’ Financial Situation

Millennials face multiple financial challenges since they experienced the Great Recession and, currently, the Covid-19 pandemic . These put millennials in a situation where they have limitations in their earnings and opportunities. Despite these, millennials tend to possess better education, get good jobs, and have financial literacy (Bialik & Fry 2021). They have access to better education since technology has led to the age of information. Millennials can access various types of data online easily and even take educational courses online, providing them with a variety of choices for their education and career. Technology has also led to the creation of more jobs, giving more opportunities to millennials.

Furthermore, the financial literacy of millennials allows them to make better and unconventional choices. Millennials tend to delay marriage, extend the time living with their parents, and save 36% more of their annual income (Bialik & Fry 2021; Chiavarone 2019). They delay marriage to focus on their careers and avoid obligations that can make their financial situation harder. They extend their time living with their parents to save on rent and other expenses. These choices, along with  avoiding unhealthy spending habits , allow millennials to save more despite the value of their salary. According to Pew Research Center’s Data, millennials with a bachelor’s degree or higher earn significantly more than high school graduates (cited in Bialik & Fry 2021). While their earnings vary, the 36% increase in their savings suggests that they find a way to save money.


Since millennials are financially literate, most look and delve for investment opportunities. They make plans for their jobs, think about retirement savings, avoid unnecessary loan interests, and diversify their portfolio (Lusardi & Oggero 2017). According to Morgan Stanley (n.d.), when millennials invest, they put a focus on environmental, social, and governance factors (cited in Chiavarone 2019). This implies that millennials will prefer investment opportunities that focus on social responsibility rather than sole financial gain. This is a significant factor that can affect the economy in multiple ways. Businesses and other organizations looking for investors will have to keep the three factors in mind when creating their portfolios. They will need to integrate social responsibility on top of financial opportunities to gain the interest of millennial investors.

Millennials are also more open to new forms of investments and are comfortable investing in emerging markets. According to CB Insights (2021), 49% of millennials are comfortable investing in cryptocurrency, and 12% expect that cryptocurrency will be the best investment for the next decade. This implies that millennials are looking for great investment opportunities that have high returns and are open to new mediums. Businesses, financial institutions, and other organizations can take advantage of this and offer beneficial investments that will help both the economy and the millennial investors.

Use of Financial Services

Aside from their investment choices, millennials are more likely to use financial services. According to Lusardi & Oggero (2017), ownership of bank accounts may lead millennials to have better saving habits, or alternatively, their financial literacy promotes the motivation to use financial services. Though these two ideas are contradictory, they show that millennials utilize and trust financial services. They will be more open to accepting insurance plans, investment options, and other financial services that will allow them to either earn or save more. This means that banking institutions and other organizations that offer financial services can expect more millennial users.

Transportation and Car Ownership

Millennial habits, such as delaying marriage and staying in with their parents have led to a slight change in the transportation and car dealership industry. According to Knittel & Murphy (2019), the percentage of vehicles per household has decreased to about less than 1% due to millennials’ financial habits. Since millennials do not start a family until their mid-30s, they do not need to own cars to ease the transportation of a family. The fact that many millennials are staying longer with their parents further contributes to the decrease since they can borrow their parent’s or family's car. The popularity of ridesharing and transportation application services may also contribute to this slight decrease.

The investment approach of millennials also affects their decision regarding car ownership. Since automobiles are one of the main contributors to pollution and climate change, millennials may prefer more eco-friendly alternatives. They will look for transportation options that are carbon-free and have fewer ecological footprints (Knittel & Murphy 2019). However, Klein & Smart (2017) found out that while the majority of millennials have fewer cars, independent millennials own more cars despite low salaries. Independent millennials are individuals who have left their parent’s house and are financially and economically dependent. They purchase cars to show their financial capability and independence.

Millennials’ approach to car ownership has a minimal effect on the industry since there is only a less than 1% decrease, which is a negligible statistic. Furthermore, studies suggest that millennials have more mileage in their vehicles than other generations (Knittel & Murphy, 2019). This indicates that they use personal vehicles more when traveling, spending more on maintenance and fuel. The transportation industry and car dealerships can expect a minimal change in their demand, however, leaning to more eco-friendly designs may lead to long-term benefits.

The Internet and Social Media

The internet became a necessity as millennials grew to become adults. This led to a generation with an affinity for technology. According to Cussen (2022), millennials spend more on online shopping than previous generations and they prefer to order take-out instead of dining in. This is because of the availability of delivery services, which peaked with the continued popularity of smartphones and online services. The effects of the Covid-19 pandemic are also a contributing factor to the currently growing preference for take-outs and delivery services. Businesses and organizations will need to adapt to these preferences and move their marketing and advertisements online.

Along with the popularity of the Internet is the millennials’ heavy social media use. Millennials utilize social media as their platform to express themselves and share their ideas with friends and other people. They share everything on social media and often base their buying decisions on advertisements and trends online. According to the National Chamber Foundation (2012), millennials utilize the Internet and social media as a basis for their buying decisions. They ask their online friends for reviews or feedback regarding a product, which would have a large influence on their decision. They will feel more confident in purchasing a product or service that their online friends use and post about online than a product that has no social media presence.

This also allows millennials and social media to affect the market directly. Millennials on social media can act as influencers and offer testimonials regarding products and services (National Chamber Foundation 2012). If an influencer or a respected online group promotes a product, the product will receive more interest and sales. Alternatively, if an influencer or an online group reviews a product negatively, it can have detrimental effects on the company and its products. Companies should then produce products and services that will get the positive attention of social media users and avoid the development of a bad corporate image. They will need to put focus on their social media and online presence to avoid the spread of false and harmful information.

Real Estate Industry

One of the industries that the millennial financial habit has affected is real estate. Most millennials prefer to rent a house or an apartment instead of buying new homes (Lake 2022). Since millennials make up the majority of adults today, the real estate market may experience a decline in new home sales. Millennials’ preference for using smartphones and online services has also changed real estate marketing. They prefer to look for homes online and utilize text messaging as a primary way of communication (Lake 2022). Agents and companies are starting to adapt to this through virtual tours and using electronic communication.


Millennials entered an economy that is a result of a great recession and presented limitations to their financial opportunities. However, technological and financial innovations allowed them to access opportunities that made way for better financial decisions. Millennials developed a preference for social responsibility, financial literacy, and technology; all of which have forced economies to adapt. Companies have to incorporate social responsibility in their products and services to appeal to millennials; Institutions must provide beneficial financial services to gain the investments of millennials; Organizations need to utilize technology to communicate and reach millennial consumers. Millennials are slowly affecting the economy and its different players, causing changes in industries and business approaches.

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Bialik, K. and Fry, R. 2019. Millennial Life: How Young Adulthood Today Compares with Prior Generations [Online]. Pew Research Center. Available at Accessed May 24, 2022. 2021. From Investing to Budgeting, How Millennials Are Disrupting Personal Finance. CB Insights. Available at,services%20to%20reflect%20these%20preferences. Accessed May 24, 2022.

Chiavarone, S. 2019. This is How Millennials are Shaping the New Economy. CNBC. Available at . Accessed May 24, 2022.

Cussen, M. 2022. Money Habits of the Millennials. Investopedia. Available at Accessed May 24, 2022.

Klein, N. and Smart, M. 2017. Millennials and Car Ownership: Less Money, Fewer Cars. Transport Policy. Vol. 53. Pp 20-29. Available at Accessed May 24, 2022.

Knittel, C. and Murphy, E. 2019. Generational Trends in Vehicle Ownership and Use: Are Millennials Any Different? National Bureau of Economic Research. Available at Accessed May 24, 2022.

Lake, R. 2022. How Millennials Are Changing the Housing Market. Investopedia. Available at Accessed May 24, 2022.

Lusardi, A. and Oggero, N. 2017. Millennials and Financial Literacy: A Global Perspective. Global Financial Literacy Excellence Center. Available at Accessed May 24, 2022. 2012. The Millennial Generation. National Chamber Foundation. Available at Accessed May 24, 2022.

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