Moving back in with parents may be bad for your wallet
- A new study by Sewin Chan found that boomerang moves (moving back in with parents) can be economically problematic for young adults in their mid- to late-20s.
- The study, which analyzed data from the Census Bureau survey of 3.5 million US households, revealed that participants in internal migration often diminish their prospects for upward mobility due to relocation to a metro area with a weaker job market.
- Boomerang moves are often motivated by a singular event, such as losing a job or divorce, and can allow young adults to save money to attend college or start a family/business in the future.
- The study found that an increase in boomeranging is an indicator of the economic realities facing young adults, suggesting that many aren’t able to find jobs with living wages in high-cost areas or face labor market disruptions.
A new study finds “boomerang” moves by people in their mid- to late-20s can be economically problematic.
When young adults boomerang—that is, move back in with their parents after living independently—it’s often done to save on rent, child care, or other major expenses.
But boomerang moves in the US, which increased from 6.8 to 8.2% of all moves by people aged 24 to 29 between 2006 and 2019 (a year in which more than a quarter million individuals in this age bracket moved back home), can get in the way of a person’s economic health.
The reason is simple: a return to the roost frequently means relocation to a metro area with a weaker job market.
So finds the new study by Sewin Chan, economist and professor at NYU Wagner. Assisted by two authors, Katherine O’Regan of Wagner and Hsi-Ling Liao of the University of Chicago, Chan tapped granular data from the Census Bureau survey of the social, housing, and demographic characteristics of 3.5 million US households, revealing that participants in this internal migration often diminish their prospects for upward mobility.
Those who pull up stakes in one metro area to live with parents or guardians in another are typically motivated by a singular event: the loss of a job, say, or a divorce or separation. Boomerang moves can allow young adults to save money to attend or finish college or grad school, or to start a family or business in the future.
An increase in boomeranging is, in fact, an indicator of the economic realities facing young adults. It suggests that a growing number aren’t able to find jobs that pay a living wage in relatively high-cost areas, or that they face labor market disruptions like a job loss that necessitate a return to the safety net of the parental home.
As much as a boomerang move may make sense to a young adult, Chan’s study in the Journal of Urban Affairs shows that it often comes at the price of forgoing of an opportunity to move to an area with better employment prospects than the region where their parents live.
And that’s especially true for the many young adults whose parents are of modest means and reside in low-income areas.
“While a boomerang move can be a necessary and positive step for an individual, our findings show that for many, particularly those from disadvantaged backgrounds, it can come at the cost of economic mobility,” comments Chan.
Here, Chan digs into the implications of the growing share of young adults on the move back to familiar surroundings:
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