Moving Back Home: Is It Bad for Your Finances?
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The Economic Cost of Boomerang Moves: Why Moving Back Home Can Hinder Your Career
Table of Contents
(Last updated: October 26,2023)
A growing number of young adults are choosing to move back in with their parents, a trend often referred to as “boomeranging.” While frequently seen as a practical solution to financial pressures like rent, childcare, or job loss, a new study suggests this move can come with a hidden economic cost.The research indicates that returning to the parental home often involves relocating to a metro area with fewer job opportunities, ultimately hindering upward mobility.
What is a “Boomerang Move”?
The term “boomerang move” describes the phenomenon of young adults (typically in their mid-to-late 20s) who, after a period of independent living, return to live with their parents or guardians. This trend has been increasing in recent years, particularly during times of economic uncertainty. Between 2006 and 2019, boomerang moves among 24-29 year olds in the US rose from 6.8% to 8.2% of all moves. This translates to over a quarter of a million individuals in this age group moving back home in 2019 alone.
The Study: Data and Methodology
Economist Sewin Chan, professor at NYU wagner, led the research, assisted by Katherine O’Regan of Wagner and Hsi-Ling Liao of the University of Chicago. The study utilized granular data from the Census Bureau survey of the social, housing, and demographic characteristics of 3.5 million US households. This allowed researchers to analyze internal migration patterns and their correlation with economic outcomes. The researchers focused on identifying moves specifically motivated by a return to parental housing.
– drjenniferchen
This study provides valuable insight into a complex issue.While moving home can offer short-term financial relief, the long-term consequences for career trajectory and earning potential are significant. It’s crucial to note that the data ends in 2019, before the COVID-19 pandemic, which likely exacerbated this trend. Further research is needed to assess the impact of the pandemic on boomerang moves and their economic effects.
Why Moving Back Home Can Hurt your Career
The core finding of the study is that boomerang moves are frequently linked to relocation to metro areas with weaker job markets. Individuals often return home following a significant life event – job loss, divorce, or separation - and these events often coincide with a move to a location offering lower earning potential.
Here’s a breakdown of the key factors:
* Limited Job Opportunities: Smaller cities and towns, where parents frequently enough reside, typically have fewer high-paying jobs compared to major metropolitan areas.
* Skill Mismatch: The skills and experience of the returning young adult may not align with the available jobs in the new location.
* Network Effects: Leaving a professional network in a larger city can hinder job searching and career advancement.
* Reduced Competition: A less competitive job market might lead to accepting lower-paying positions.
The Impact on Earning Potential: Data & Analysis
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While the study doesn’t provide specific dollar amounts for earning potential loss, the researchers found a statistically significant correlation between boomerang moves and diminished prospects for upward mobility.[[[[Placeholder for specific statistical findings from the study – e.g., percentage decrease in earnings, impact on career progression.]
What Happens After the Boomerang?
the study suggests that the initial motivation for a boomerang move – a job loss