Boomerang Bias: Examining the Effect of Parental Coresidence on Millennial Financial Behavior

Posted: 12 Nov 2019

See all articles by Michael J. Bentley

Michael J. Bentley

Farient Advisors

Vicki L. Bogan

Duke University; Cornell University

Date Written: April 29, 2019

Abstract

Millennials, or those born between 1980 and 1998, face unique financial situations relative to the general population. With increasing levels of educational loans and debt, many choose to live with their parents as a means of financial support, thus resulting in differing financial behaviors when compared to Millennials who live independently. This paper analyzes the effect of parental coresidence on debt, asset ownership, and asset values. We find evidence linking parental coresidence with decreases in magnitude and likelihood of having debt, along with significant differences in “risky” and “safe” asset ownership and valuations. Moreover, we find causal evidence that parental coresidence is used as a mechanism to decrease general debt.

Full Text Available Here: https://doi.org/10.1002/cfp2.1034

Suggested Citation

Bentley, Michael J. and Bogan, Vicki L., Boomerang Bias: Examining the Effect of Parental Coresidence on Millennial Financial Behavior (April 29, 2019). Financial Planning Review, Vol. 2, Issue 1, March 2019, Available at SSRN: https://ssrn.com/abstract=3485680

Vicki L. Bogan

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Cornell University ( email )

Warren Hall
Ithaca, NY 14853
United States
607-254-7219 (Phone)

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