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Title: Essays on Economic Conditions and the Living Arrangements of Young Adults
Citation Type: Dissertation/Thesis
Publication Year: 2020
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Abstract: This dissertation contains two essays on the relations between economic conditions and the living arrangements of young adults (22-34 year olds) in the 2000s. In the first chapter, I use data from the American Community Survey and the Current Population Survey for the period 2000-2018 to document recent trends in youth living arrangements and to estimate the impact of state-level economic conditions on individual-level residential outcomes. I find a steep increase in parental coresidence among young adults since 2000. The rise in coresidence is accompanied by declining outflows from the parental home as well as rising inflows into the parental home. Regression results show significant, positive effects of rents on the probability of living with parents relative to all other living arrangements; and significant, negative effects of rising rents on the probability of leaving the parental home. Rents are found to have a larger impact on the living arrangements of non-whites and non-college young adults compared to their respective counterparts. For such youths, rising rents also show a robust, positive association with the probability of returning to the parental home. Overall, rents explain between 9% and 14% of the rise in parental coresidence among young adults over the period 2000-2018. Although the 2000s are also characterized by declining labor market conditions of prime-age workers, changes in prime-age wages are found to explain no more than 5% of the increase in parental coresidence whereas prime-age employment rates show no robust associations with living arrangements. In the second chapter, I take the analysis to the MSA-level and use data on 229 MSAs based on the 2000 Census and the American Community Survey to estimate novel, growth models of coresidence. I find significant, contemporaneous effects of growth in earnings and rents, respectively, on growth in parental coresidence among both non-college and college-educated young adults with larger effects on the less-educated. In the long run, however, only the effects of rents are significant such that MSAs which experience higher growth in housing costs during the housing boom of 2000-2006 also experience higher growth in parental coresidence among all young adults over the entire 2000s. In contrast, changes in the employment rates of prime-age workers show no strong associations with living arrangements either contemporaneously or in the long-run. Overall, both chapters of my dissertation imply that rising rents are the main cause of rising coresidence in the 2000s to the extent the latter is an economic phenomenon.
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Authors: Kamal, K M Arefin
Institution: Clemson University
Department: Economics
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Data Collections: IPUMS USA, IPUMS CPS
Topics: Housing and Segregation, Labor Force and Occupational Structure, Poverty and Welfare
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