U.S. Economy: Youth at Home
Young Americans began moving in with parents in large numbers before the recession hit.
- US saw its share of young people living with parents rise by about 4.5% between 2005 and 2014.
- Since 2005, more than 3 million additional US youth – beyond normal trends – moved in with parents.
- Much of the shift of young Americans moving in with parents occurred before the recession.
1. The United States saw its share of young people living with parents rise by about 4.5 percentage points between 2005 and 2014.
2. Eight of the advanced OECD economies in the EU matched or exceeded that increase.
3. More than 3 million additional young people in the United States moved home or did not move out in the first place compared to the relatively normal conditions before 2005.
4. Under the “normal” circumstances, around 27% of 18 to 34-year-old Americans would be living with parents. Instead, about 31.5% are today.
5. With continued problems in the labor market, the trend seems unlikely to return to normal soon.
6. Among the subset of 25 to 34-year-olds in the United States who are living with their parents, the overwhelming share of the increase can be explained by youth underemployment.
7. About 35% of Americans in that age cohort were underemployed in 2015.
8. If this pattern persists long enough, the United States could experience a cultural shift toward keeping together close-knit, multi-generation families. It would thus become more like European countries.
9. Notably, almost half the increase above the normal rate of U.S. young people living with their parents occurred from 2005 to 2008.
10. This means it happened even before employment changes began to take effect. This could also indicate a deeper structural development that the ensuing cyclical downturn obscured.
Sources: The Globalist Research Center, OECD and Goldman Sachs Macro Economic Research