Economic Conditions and the Cyclical and Secular Changes in Parental Coresidence Among Young Adults: 1960 to 2007
36 Pages Posted: 4 Nov 2010
Date Written: April 1, 2010
Abstract
The recent economic downturn in the United States has coincided with stories of young men and women choosing to remain at home, or to move back in with their parents since they can't afford to live independently. But do economic declines cause increases in parental coresidence, or are 'boomerang kids' merely a continuation of a long secular trend towards more living with parents among young adults? This paper first describes changes in parental coresidence from 1960 to 2007, and then turns to an analysis of the causal link between economic conditions and living arrangements among young adults using data on more than 12.5 million individuals from 1960 to 2007. Comparing changes in economic conditions across U.S. states to changes in living arrangements, I find that fewer jobs, low wages, and high rental costs all lead to increases in the numbers of men and women living with their parents. The magnitudes of the effects are quite large: for men, I estimate that changes in economic factors alone are large enough to have caused the observed changes in parental coresidence between 1970 and 2007. For women, since economic opportunity was expanding over the time period we would have expected fewer women living with parents when in fact the opposite occurred. I speculate on the reasons for this asymmetry, and results by race and education subgroups are also discussed.
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