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Friday, August 3, 2012

Option to move in with parents is an asset



Greg Kaplan of the University of Pennsylvania has found that young adults who have the option to move back in with their parents after a job loss have an easier time finding the next good job. Apparently, being able to fall back on free room and board during tough times can be helpful. Who knew?

Kaplan goes into specifics (this research formed part of his Ph.D. dissertation). For example, it’s far more important for young people in poor families to be able to move back in with their parents. Not being able to live with parents after a job loss was about five times as devastating for kids from poor families as for it was for rich kids.

Living with one’s parents also leads to higher eventual earnings.  People who have a free place to live are less desperate to grab the first job offer they receive. They can often hold out for better paying jobs, or jobs that are more in line with their interests and training. Young adults who live with their parents also have more discretionary spending than those who don’t, especially after a job loss. Thus, the economy at large benefits when parents allow their grown children to live with them.

So, to summarize, during tough economic times, have parents who will let you live with them.  It seems that both parents and kids are getting this message. In Kaplan’s sample, 40% of twenty-two year olds who had moved out returned to their parent’s house for at least a month. This is corroborated by a recent Pew survey.

As someone who graduated at a time when young people had every expectation of being able to leave home forever after college, this makes me sad. I think it’s good for parents to be aware that welcoming their grown children back home can be enormously helpful for the kids both in the short and long term. However, I wish fewer young adults had to rely on that option.
 

4 comments:

  1. As a GenXer, I find this whole moving-back-home thing amusing. Most of us in my cohort got the very clear message that once we were 18, we were on our own. Our options were to join the military, find some menial job and share an apartment with 20 of our peers, or send ourselves to college. After all, the wonderful Baby Boomers toured Europe after graduating, so therefore we wouldn't need any help either. Moving back home? Our parents got rid of our beds the day we got our high school diplomas.

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  2. True. Of course, when I was an undergrad you could easily pay for a year's tuition at a state school with a summer job. Students today have it much harder.

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    1. I went to a cheap state school in the 1980s. I had several scholarships. I still worked between 40 - 60 hours/week just to pay for my school, housing, books, food, etc. Sure, tuition was lower, but minimum wage was $1.85/hr.

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  3. Hey, there is a broken link in this article, under the anchor text - a recent Pew survey
    Here is the working link so you can replace it - https://selectra.co.uk/sites/selectra.co.uk/files/pdf/pew-muslim-americans.pdf

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