Household Formation over Time: Evidence from Two Cohorts of Young Adults Household Formation over Time: Evidence from Two Cohorts of Young Adults

Much recent discussion has centered on the decline in the household formation of young adults during and following the Great Recession. Many young individuals chose to live at home rather than move out to form their own households, while others moved back in with their parents after previously living independently. Numerous reports and articles have explored the recent household-formation behavior of young adults, as economists, sociologists, and others try to determine why the number of young adults living independently has decreased. Understanding these changes in co-residence patterns is important because a decline in household formation has potential implications for homeownership, residential investment, wealth building, and fertility—factors that matter for both the macroeconomy and for the well-being of young adults as they age. To date, much of this analysis has examined either household-formation patterns over time or the potential reasons for the recent decline in household formation. Less research has focused on how the predictors of household formation have potentially shifted over time. The analysis in this paper, in which the authors compare parental co-residence rates of individuals 23–33 years of age within and across cohorts using individual-level data from two different cohorts (1979 and 1997) of the National Longitudinal Survey of Youth, helps to fill this gap.

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