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Abstract
Living arrangements, reflecting overlapping decisions regarding home leaving, household formation, and marriage, are an integral part of the transition to adulthood in the contemporary United States. Theoretical formulations suggest the importance of structural economic conditions, particularly labor and housing markets, in explaining young adults' living arrangements. However, most research regarding the impact of economic conditions has examined marriage, with no consideration of its competing alternatives. The aim of this project was to assess the impact of metropolitan economic conditions on young adults' living arrangements. A hierarchical dataset based on the 1990 Census Public Use Microdata Samples was built to test the hypotheses. The dataset contained information about black and white individuals ages 18-30 nested in Metropolitan Areas--270 areas for whites and 92 for blacks. The dependent variable for the analysis grouped living arrangements into five mutually exclusive categories: living with parents, living with unrelated roommates, living alone, living with an unmarried partner, and living with a spouse. The independent variables included several measures of individual and metropolitan earnings levels calculated from earnings equations estimated for each Metropolitan Area. Multinominal logistic regression was used to estimate the likelihood of being in different living arrangements as a function of exogenous metropolitan and individual variables. Separate equations were estimated for each race-gender group. The results demonstrated that individual earnings had moderate to large impacts on the likelihood of the various arrangements, but that the effects of metropolitan earnings premiums were generally negligible. In contrast, metropolitan rents had strong effects on all arrangements. In particular, in areas with higher rents, all groups were much less likely to marry and to live alone. Other results of note include a strong, positive effect of sex ratios on the likelihood of marriage for all groups. Residence in the Northeast and West regions also had striking effects, with persons in all groups much more likely to live with parents in the Northeast and away from parents in the West. Overall, the results of the project suggest the importance of local structural conditions in shaping living arrangements among young adults.
