Generational and Gender Differences in Discretionary Consumption Under Economic Precarity: Post-COVID Trends Among Gen Z

• Camilo Alvarez, Economics, University of Delaware

• Thomas Bridges, Economics, University of Delaware

Prior research suggests that economic downturns can prompt shifts in consumer behavior, often leading to increased spending on status-related or coping-oriented goods. One notable theory, the “lipstick effect,” proposes that women may increase purchases of non-essential beauty products as a form of psychological resilience during recessions. Expanding on this framework, this study investigates broader gendered patterns in discretionary spending among Gen Z adults (ages 18–25) in the years following the COVID-19 recession. I examined how employment status and household dynamics shaped financial behavior during a period of heightened job precarity. Using Public Use Microdata from the Consumer Expenditure Survey (2020–2024), I categorized respondents by gender, employment status, and household structure. I then analyzed expenditure patterns across two key categories: “investment goods” aimed at improving long-term career prospects (e.g., education and professional development), and “coping goods,” defined as discretionary purchases that may support emotional well-being (e.g., entertainment, dining out, and clothing). To provide historical context, I compared Gen Z’s spending with that of Millennials during a comparable age range (2008–2010) during the Great Recession. This cross-generational analysis sought to uncover distinct gendered responses to economic uncertainty and advance our understanding of how young adults navigate financial instability.