Millennials have better job prospects and slightly higher earnings than they did a few years ago. Yet they are no more likely to be living independently — in fact, more live with their families now than during the depths of the recession, a recent Pew Research Center analysis of US Census Bureau data shows.
Though there are nearly 3 million more 18- to 34-year-olds today than when the recession started in 2007, fewer live on their own now than did eight years ago — 42.2 million versus 42.7 million. While unemployment among this group has fallen sharply since its peak in 2010, from 12.4 percent to 7.7 percent in early 2015, the share of millennials living with their parents rose from 24 percent to 26 percent during that same period.
“Young adults got hit very hard by the great recession, but as the job market healed, we expected they would start living independently in greater numbers,” said Pew senior economist Richard Fry, who conducted the analysis. Yet despite considerably improved conditions, “so far this hasn’t materialized.”
Several explanations have been proposed for more millennials living at home. An earlier Pew report cited falling marriage rates and increasing college enrollment among 18- to 24-year-olds as possible factors, along with the weak job market. (The census data used in the analysis counted students living in dorms as living with their parents.)
Yet college enrollment figures for 18- to 24-year-olds have declined since peaking in 2012. And declining marriage rates among millennials might not have much of an impact, Fry said, since those who are cohabitating with a partner without being married are still more likely to set up their own household, whether through owning or renting, than to live with parents.
Some economists have pointed to student loan debt as keeping young adults from moving out, or driving them to move back in with their families. This, too, doesn’t tell the whole story, Fry said. Among millennials with only a high school education — and presumably no or minimal student debt — fewer are living independently than in years past. And while the job market for this group hasn’t improved as much as it has for more educated young adults, it still is better than it was a few years ago.
There may be a silver lining to adult kids staying at home longer. In a 2013 Clark University poll of parents of 18- to 29-year-olds, 61 percent of those with an adult child at home characterized the experience as “mostly positive.” Two-thirds (67 percent) said they felt closer to their child emotionally.
Yet despite the bonding and financial benefits of this sort of arrangement, it isn’t so great for the larger economy, Fry said.
“The housing industry has been waiting for young adults to get out and set up households, but this hasn’t happened,” he said. “This doesn’t matter to just the realty company or the landlord, but also to the telecom companies, the utilities companies, the furniture companies, and the home improvement stores as well.”Ami Albernaz can be reached at email@example.com.