A Closer Look at Generation Z: Financial Knowledge and Financial Anxiety during an Economic Shock

This study examined financial anxiety, financial knowledge, and the impact of coronavirus disease 2019 (COVID-19) shocks on Generation Z, comparing them with Millennials, Generation X, and Baby Boomers. Using the 2021 U.S. National Financial Capability Study (NFCS, N = 21,734), we estimated ordinary least squares (OLS) regressions to identify generational differences. We tested the moderating role of financial knowledge through interaction analyses and post-estimation Wald-type tests of coefficient equality across generations. Generation Z exhibited the highest level of financial anxiety (M = 5.27) and the lowest level of objective financial knowledge (M = 2.33) among all the cohorts, and also reported the greatest exposure to COVID-19-related health and labor shocks. COVID-19 shocks were positively associated with financial anxiety, whereas both objective and subjective financial knowledge were negatively associated, suggesting a protective role for financial literacy. Wald tests confirmed that these associations differed significantly across generations. Interaction analyses revealed asymmetric moderating patterns: objective financial knowledge was associated with reduced anxiety differentials in response to combined health and labor shocks, whereas subjective financial knowledge was associated with amplified anxiety differentials among respondents experiencing labor-related shocks. These findings highlight the distinctive role of objective financial knowledge in fostering resilience during economic disruptions and the need for generation-specific financial education programs.