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This study uses National Longitudinal Survey of Youth 1979 cohort data from 1994 through 2012 (N = 16,108person-years, 4,671 individuals) to investigate how coresidence with adult children influences asset levels among parents. It applies hybrid mixed effects regression models that partition between- and within-person variation to estimate parental savings and financial assets over time and across different households. The results suggest that coresidence with adult children led to decreases in parental assets and savings. In the years in which their children lived at home, parents held 24% less in financial 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 insecurity, limited wealth, and the rise in coresidence among young adults, this study also offers broader implications for the interconnectivity of financial hardship across generations.
Key Words: coresidence, family economics, inequality, intergenerational transfers, National Longitudinal Survey of Youth (NLSY).
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In recent decades, changing norms and expectations, as well as higher levels of economic insecurity, have elongated the transition to adulthood, with younger adults now passing certain milestones such as marriage and homeownership at much later ages than their parents (Seltzer & Bianchi, 2013). As a result, young adults in the United States have become more reliant on their parents for financial and nonfinancial 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 employment 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 economic situations of young adults, the continued reliance of adult children on parents could potentially have lasting effects for parental resources and economic well-being, which warrants additional research into the consequences for parents. Specifically, questions remain as to whether coresidence stands out as a type of parental support with stronger effects on parental resources than other types of planned wealth transfers.
To address this situation,...