Leaving and returning to the parental home during the economic crisis

Leaving and returning the parental home in hard economic times

Families can often provide a ‘haven in a heartless world’ for young people looking for work by providing housing, resources and finance in adverse times. Being unemployed or inactive makes it harder for young people to move into independent living or think about forming their own family. Has the recent economic crisis made it more difficult for the young to leave home? And, what evidence is there of a ‘boomerang generation’, whereby young people are more likely to return to their parents when they become unemployed?

Gökşen et al. (2015) describe the possible economic, institutional and cultural factors affecting the process of transition to adulthood and independent living. Across Europe, the share of young adults (below the age of 35) living with their parents has increased over time. Whereas this share of those still living at home is below 50% in Northern and Continental countries, it is above 65% in Mediterranean and over 70% in Central-Eastern European and Baltic countries. The increase in those staying at home accelerated after the 2008 crisis, particularly in Northern and Continental European countries.

Leaving and returning decisions: Between (un)employment and partnership

We wanted to find out what affect the Great Recession had on young people leaving (or returning) home? What difference does having a job or a partner have on their ability to live independently? And, are there significant differences across country groups?

Mazzotta and Parisi (forthcoming) analysed the process of leaving and returning to the parental home for young people in 14 European countries: these included Continental countries like Austria, Belgium, France, and Luxembourg, four Southern countries (Cyprus, Italy, Portugal and Spain), three Eastern countries (Czech Republic, Poland, and Slovakia) and three Baltic countries (Estonia, Lithuania, and Latvia).

Using data from the European Union Statistics on Income and Living Conditions (EU-SILC), we predicted the probability of youth (aged 18–34) leaving the parental home and, in turn, their probability (when aged 20–36) of returning to live with their parents (i.e., boomeranging) in a four-year period. Given the strong interdependence between living independently, finding employment and being in a partnership, we simultaneously modelled these three states for each of the two transitions: leaving and returning home. Net of other individual characteristics, we imagined the effects of the Great Recession as being to reduce the probability of leaving home and increase that of returning to the parental home.

Leaving home is getting harder

The lowest percentage of youth leaving the parental home each year is found in the Eastern, Baltic, and Southern European countries (3.0%, 4.5%, and 5.9%, respectively, on average over the entire period 2005-2013). It is here that young people postpone exit the longest. The highest rate of exit is in the Continental countries (13.6% on average, over the entire period). There has been a decrease in the share of young people leaving home between 2005 and 2013, except for the Eastern countries, where the exit rate is very low over the entire period.

Having a job is often a prerequisite for leaving home and also for forming a partnership. The Baltic and Eastern European countries have particularly high shares of people in a partnership still living with their parents. In general, for all groups of countries, forming a partnership seems to be more predictive than having a job in explaining why young people leave home. However, if the partnership breaks up (not having a partner), this is more likely to result in a return home − compared to losing one’s job.

Apart from individual and family characteristics, the availability of housing and housing market circumstances strongly influence the opportunities for young adults to leave their parents’ homes. A combination of high levels of home-ownership, difficult access to mortgages and high housing prices seems to constitute a significant obstacle to young people’s residential independence and family formation.

Returning home is rare but is becoming more likely

Having left, returning to the parental home is a rather unlikely event; return rates amounted to less than 1% per year on average, across all country groups. Nevertheless, differences emerged during and after the economic crisis: there was an increased return to the parental home in all country groups, with the exception of the Eastern countries.

The Continental and Eastern countries have the lowest percentage of young people returning home, with an increase right after the onset of the crisis (2009–2010), while in the Baltic countries recorded an increase that lasts longer—from 2008–2009 until 2010–2011.

In the Southern countries, the probability of returning home increased constantly across all periods, indicating that it is structurally more difficult for young people to live independently in the South. There was also evidence of a long-term trend in boomeranging (returning home) in the Southern countries.

Union dissolution is a key determinant of returning home in all countries, while not being employed increases the probability of returning home in the Continental, Southern and Baltic countries. We also found that earnings help maintain independence: the higher the relative personal income of young people, the lower the likelihood of them returning home in all country groups in the analysis.

The importance of a job: Harder to leave and more likely to return

The levels of completed education are an important predictor of people’s choice of living arrangements: those with higher education are more likely to live independently, even though there are variations across countries.

We found that the Great Recession reduced the probability of leaving home; it also increased the probability of young people returning home, although there were significant differences between countries.

• Young people from Continental countries were more likely to leave home, but these numbers also declined during the Great Recession.
• Young people from Southern and Eastern European are less likely to leave home when they are very young, and during the Great Recession those leaving also declined; there was an increase in those who returned to the family home in Southern Europe.

Decisions to leave or return home were less affected by whether or not the young person had a job; being in a partnership had more influence in this respect (leaving upon family formation and returning upon partnership dissolution).

When families matter more, state support can make a greater difference

More than in previous recessions, families seem to play a protective role by allowing their adult children to stay longer at home, thus enabling young adults to overcome the economic difficulties faced during the Great Recession. When it is families who increasingly bear the responsibility for buffering their adult children against market failure, being born in a more affluent family becomes more important in defining individuals’ opportunities − and, in turn, their capacity to form a family − along the life course.

Public housing policies such as housing allowances and rent-controlled or free (social) housing seem to have a considerable impact on the decision to leave and return to the parental home. With the exception of Central-Eastern European countries, benefiting from housing allowances seems associated with a higher probability of leaving the parental home across all welfare regimes. Housing allowance also plays a role in the reverse decision: its lack seems to be associated with more frequent decisions to return to the parental home. Returners are more likely to be found among home-owners and private tenants.

The findings support the idea of an association between the household resources of young people’s families and their decisions to leave or return to the parental home. Stronger parental resources seem to facilitate transitions into adulthood, whereas the consequences of unemployment and precarious work negatively reflect on young people’s opportunity to establish their own families. Economic independence, promoted through employment, income support or housing allowance, is thus critical to dismantling the barriers encountered in the transition to independent adulthood.