When the Kids Live at Home: Coresidence, Parental Assets, and Economic Insecurity

• Author: Michelle Maroto
• DOI: http://doi.org/10.1111/jomf.12407
• Published date: 01 August 2017
• Date: 01 August 2017

M M University of Alberta

When the Kids Live at Home: Coresidence, Parental

Assets, and Economic Insecurity

This study uses National Longitudinal Survey of

Youth 1979 cohort data from 1994 through 2012

(N=16,108 person-years, 4,671 individuals) to

investigate how coresidence with adult children

inuences asset levels among parents. It applies

hybrid mixed effects regression models that par-

tition between- and within-person variation to

estimate parental savings and nancial assets

over time and across different households. The

results suggest that coresidence with adult chil-

dren led to decreases in parentalassets and sav-

ings. In the years in which their children lived at

home, parents held 24% less in nancial assets

and 23% less in savings when compared with

the years when adult children were not present.

By expanding previous research that shows a

relationship between increasing economic inse-

curity, limited wealth, and the rise in coresi-

dence among young adults, this study also offers

broader implications for the interconnectivity of

nancial hardship across generations.

In recent decades, changing norms and expec-

tations, as well as higher levels of economic

insecurity, haveelongated the transition to adult-

hood, with younger adults now passing cer-

tain milestones such as marriage and home-

ownership at much later ages than their parents

Department of Sociology, Universityof Alberta, 6-23 Tory

Building, Edmonton, AB, Canada, T6G 2H4

(maroto@ualberta.ca).

KeyWords: coresidence, family economics, inequality,inter-

generational transfers, National Longitudinal Survey of

Youth (NLSY).

(Seltzer & Bianchi, 2013). As a result, young

adults in the United States have become more

reliant on their parents for nancial and non-

nancial support throughout this transition, and

many have been opting to reside within their

parents’ households for longer periods of time

(Kornrich & Furstenberg, 2013). Coresidence or

“doubling up” has been particularly widespread

among millennials, the youngest cohort of adults

born in the 1980s and 1990s, in part because of

their rising debt levels and precarious employ-

ment situations (Bleemer, Brown,Lee, & van der

Klaauw, 2014; Dettling & Hsu, 2014; Wiemers,

2014). Although coresidence and other types

of parental support can help improve the eco-

nomic situations of young adults, the continued

reliance of adult children on parents could poten-

tially have lasting effects for parental resources

and economic well-being, which warrants addi-

tional research into the consequences for par-

ents. Specically,questions remain as to whether

coresidence stands out as a type of parental sup-

port with stronger effects on parental resources

than other types of planned wealth transfers.

To address this situation, I studied coresi-

dence among millennial young adults and their

parents who, in many cases, were born during the

later years of the post-World War II baby boom.

Instead of simply studying situations of the chil-

dren, I investigated how coresidence with adult

children might inuence the nancial assets

and savings of these late baby boomer cohort

parents. In doing so, I addressed the following

research questions: How might continued cores-

idence with adult children affect parental assets

and parents’ levels of economic security more

Journal of Marriage and Family 79 (August 2017): 1041–1059 1041

DOI:10.1111/jomf.12407

1042 Journal of Marriage and Family

broadly? How do parental assets uctuate when

adult children live at home, and how do coresi-

dential households compare to those with adult

children living outside the home or at school?

Although research on the implications of

coresidence for young adults has been grow-

ing, few if any studies have examined the

consequences of coresidence for the parents.

This study addresses this gap in research by

using longitudinal data from the 1979 cohort

of the National Longitudinal Survey of Youth

(NLSY79; http://www.bls.gov/nls/nlsy79.htm)

to investigate changes in assets and savings

over time. In particular, I use hybrid mixed

effects models to parse out the within- and

between-person asset effects of adult children

living in the household. The within-person

effects compare parental assets and savings in

the years when adult children are present to the

years when they are not, and the between-person

effects compare average asset differences

between individuals who do and do not live with

their adult children. This allows me to examine

differences across individuals, controlling for

key factors that include income, education, and

family structure, and to study changes within

individual assets and savings over time net of

unobserved individual-level characteristics.

I specically focus on how adult children

in different living situations—those currently

present in the household, those not present but

who usually reside in the household, those who

live at school, and those who are not present

in the household—inuence whether parents

report any nancial assets and savings and their

total nancial assets and savings. These vari-

ables reect a family’s capacity to save and the

effects of changes in day-to-day expenses, two

central components of economic security that

are likely related to the presence of adult children

in the household and elsewhere. Among parents

of adult children, I expect that the presence of

children in the household will have the strongest

negative effects on savings because of the costs

associated with children living at home.

My results support this expectation. Across

models, coresidence with adult children, much

more than having adult children living else-

where, was negatively associated with nancial

assets and savings among parents. In the years

in which their children lived at home, parents

held 24% less in nancial assets and 23% less

in savings when compared with years when adult

children were not present. Given that households

with adult children generally have lower assets

than those without, my ndings help to illustrate

how much of this transfer of wealth occurs when

adult children are living at home.

This study contributes to research on life

course transitions, intergenerational inequality,

and economic insecurity by showing how con-

tinued housing assistance for adult children lim-

its parental resources. By combining broader

perspectives that acknowledge the complexi-

ties of intergenerational inequality with theories

related to life course transitions and economic

insecurity, I am able to highlight the intercon-

nectivity of assets, debt, and nancial hardship

across generations. Moreover, the recent rise in

multigenerational living arrangements, as more

young adults have been moving into their par-

ents’ homes to deal with rising economic insecu-

rity, makes this topic particularly relevant. Debt,

particularly in the form of student loans, presents

one factor as to why many young adults have

been moving home (Bleemer et al., 2014). When

this also creates nancial hardship and reduces

parental assets through their continued support,

economic insecurity spreads from adult children

to their parents. Therefore, to complement stud-

ies that have focused on the pathways extending

from parent resources to child well-being, this

study demonstrates how disadvantage can move

in the other direction, stretching from adult chil-

dren to their parents.

B

Changing Life Course Transitions

and Increasing Economic Insecurity

With the growth of divorce, cohabitation, and

single parenthood, family demographers have

long since moved beyond a uniform model

for the family life cycle (Cherlin, 2010). Most

acknowledge that the pathways to adulthood

have also become quite varied for young adults

since the 1960s. Many of these young adults no

longer engage in a linear progression through

major life course transitions, such as leaving

the parental home, obtaining a full-time job,

marrying, and having children of their own

(Sironi & Furstenberg, 2012). Instead, the

transition to adulthood and independence has

lengthened with increased education, housing,

and transportation costs (Furstenberg, 2010;

Goldscheider & Goldscheider, 1999a, 1999b;

Swartz, 2008, 2009). These trends are also asso-

ciated with the spread of economic insecurity,