Economic conditions and the living arrangements of young adults: 1960 to 2011
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The recent economic downturn in the USA has coincided with stories of young men and women choosing to remain at home, or to move back in with their parents since they cannot afford to live independently. This paper first describes changes in parental coresidence over the last half-century, and then assesses the causal link between economic conditions and living arrangements among young adults using data on more than 15 million individuals from 1960 to 2011. Comparing changes in economic conditions across US 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 2011.
KeywordsLiving arrangements Impact of the great recession Parental coresidence Household formation
JEL ClassificationJ11 J12 R20
I thank the editor, two anonymous referees, and Sheldon Danziger, Susan Dynarski, Steven Raphael, Daniel Lichter, Kelly Musick, Sharon Sassler, and participants at a MacArthur network discussion group for helpful comments and suggestions. Comments are welcome at firstname.lastname@example.org.
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