News Column

Recession Hit Young Adults Hardest, Study Shows

April 2, 2013
young adult worker waiting for phone call

Unemployment rates increased 55% among 18- to 34-year-olds from 2006 to 2011, says a new analysis that sheds more light on just how hard the recession hit young workers.

The report, which analyzes Census data by young people's living arrangements, shows -- perhaps not surprisingly -- the highest jobless rates are among young men who live at home with their parents.

One-quarter of young men ages 18 to 24 and one-fifth of those 25 to 34 who lived with their parents didn't have a job in 2011, says the report, from the National Center for Family & Marriage Research at Bowling Green State University in Ohio.

But researchers don't know which came first -- living at home or being unemployed. "It might suggest that living in your parents' home may make you less successful ... or parents have opened their home to help them get back on their feet," says lead author Krista Payne, a social science data analyst at the center.

Young adults of both sexes who work and live independently had much higher median earnings in 2011 than working peers living in a parent's home ($24,000 vs. $9,000). And those living with parents had greater losses in median earnings during the economic slump.

Still, young adults who live with parents aren't mooching, says Millennial expert Michael Hais, co-author of Millennial Momentum: How a New Generation Is Remaking America. "Many are paying rent or have only a part-time job and may not be able to live on their own ... But they often contribute to the family financially, even if they don't earn enough to live independently."

Of those who moved out and then back, often called "boomerangs," 89% helped with expenses and 48% report paying rent, said a Pew Research Center report last year, based on a survey of 2,048 adults.

The Bowling Green analysis notes that in 2011, the unemployment rate for ages 18-34 was 13.6%, compared with 10.3% for the USA overall.

Being able to move back in with parents after a job loss can be a huge benefit, says economist Greg Kaplan of Princeton University. His research tracking 1,500 men born in the early 1980s who did not attend college found those who lost a job and moved home with the folks had essentially the same earnings in later years as people who never lost a job.

Through 2003, when his study ended, those who had the option to go back home were less likely to accept a low-paying job just to make ends meet, says Kaplan, whose research was published last year in the Journal of Political Economy.

Payne's analysis found that young adults with jobs had a 15% decrease in median earnings from 2006 to 2011 -- a drop from $22,312 to $19,000. For U.S. part-time and full-time workers 16 and older, the median 2011 income was $28,900.

"This is still a young generation," says Hais. "It may take time for it to get moving, but it is also a very well-educated generation compared to others, and once the economy turns around, their education may allow them to catch up faster," he says. "It does not necessarily mean they're doomed for all of their lives."

Payne found women fared better than men; women ages 18 to 24 not living with parents had the smallest increase in unemployment, 35%.

"The more male-centric positions really took a beating," she says.

Source: Copyright USA TODAY 2013

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