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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 Page 1

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