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137 Monthly Lab. Rev. 1 (2014)
Independence for Young Millennials: Moving out and Boomeranging Back

handle is hein.journals/month137 and id is 935 raw text is: 
Monthly Labor Review


DECEMBER 2014

Independence for young millennials: moving out and

boomeranging back

Using data from the National Longitudinal Survey of Youth 1997, this article examines the process of household
formation for young adults born between 1980 and 1984. The analysis finds that, by age 27, about 90percent of these
individuals had left their parental households at least once and more than 50 percent of them had moved back at some
point after moving out. The article also reveals that the likelihood of moving out and boomeranging back is correlated
with certain individual and family characteristics, including gender, race, educational attainment, and household
income.

Establishing an independent household has long been considered an important milestone in the
transition to adulthood. During the 2007-2009 recession, fewer young adults were establishing their
own households and more of them were moving back with parents after initially moving out. The share
of men and women ages 18 to 34 living in their parents' homes was larger in 2012 than in the early
2000s.1
   The decision to move out of the parental household may be affected not only by macroeconomic
conditions but also by social factors and individual economic variables. For example, wealthier parents
may transfer money to their children in forms that encourage either staying at home or moving out,
depending on prevailing social norms and personal preferences. Living in the parental home may mean
that parents subsidize housing costs; however, as children age, they may be less willing to accept this
arrangement.2 Likewise, a higher earnings potential may encourage a young adult to leave home.-
Conversely, poor employment conditions may create incentives for moving back as a way to hedge
against labor market risk.4
   Whether individuals leave or return home may affect aggregate housing demand, fertility patterns,
labor force mobility, and demand for public services.- Using the National Longitudinal Survey of
Youth 1997 (NLSY97), this article explores the household formation experiences of young millennials
(i.e., people born from 1980 to 1984) before age 27. It finds that while 90 percent of these individuals
left their parental homes, more than half of them returned at some point after moving out. By age 27,
close to 80 percent of millennials in this cohort were not in their parents' homes. Leaving and returning
home were related to labor market attachment and wages, as well as other individual and family
characteristics. Young adults with relatively higher wages and better employment opportunities
established and maintained household independence at higher rates.

Data and methods
The NLSY97 consists of a nationally representative sample of approximately 9,000 youths who were
12 to 16 years old on December 31, 1996. Between 1997 and 2012, these individuals were interviewed
on an annual basis. The longitudinal nature of the survey allows us to determine the percentage of
millennials who established household independence (i.e., moved out) or returned home. It also allows
us to identify other characteristics of the individuals who made these transitions.
   The NLSY97 documents the transition from school to work and into adulthood. It collects extensive
information on youths' labor market behavior and educational experiences over time. Employment data
include job start and stop dates, occupation, industry, hours worked, earnings, job search activities, and


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