Boomerang Children and Parental Retirement Outcomes

Abstract

As the share of U.S. adult children living with their parents increases, it is important to understand how children who “boomerang” back home impact their parents in their pre-retirement and post-retirement years. We use data from the Health and Retirement Study (HRS) to examine the effects of boomerang children on their parents’ labor market expectations and choices, as well as on their wealth, health, and life satisfaction. Event study analysis suggests that boomerang children return home due to short-term instabilities, such as negative shocks to marriage, income, and employment. We find that boomerang children are associated with a small increase in their parents’ subjective probability of working after age 65, and with a temporary increase in their parents’ non-housing debt. However, in the aggregate, we find no clear evidence that boomerang children impact parents’ current or future labor market choices, overall wealth, health, or life satisfaction. (We do find some evidence of an increase in hours worked among parents in the bottom wealth decile). One possible explanation for the lack of aggregate impact is that boomerang children contribute to household expenses. We find that boomerang events are associated with an increase in financial transfers from children to parents, particularly among parents in the bottom half of the wealth distribution.

JEL Classification

D1 Household Behavior and Family Economics
I1 Health
I31 General Welfare, Well-Being
J1 Demographic Economics
J26 Retirement; Retirement Policies

Key Figures

Figure 1: Adult children living in the parental home, 1960–2020. Notes: This figure shows that the share of co-resident adult children in the U.S. has increased since the 1960s. (a) Disaggregates the share by sex and (b) by age (18–24 and 25–34). Source: U.S. Census Bureau Decennial Censuses, 1960 to 1980, and Current Population Survey Annual Social and Economic Supplements, 1990 to 2020 — Figure 1: Adult children living in the parental home, 1960–2020. *Notes:* This figure shows that the share of co-resident adult children in the U.S. has increased since the 1960s. (a) Disaggregates the share by sex and (b) by age (18–24 and 25–34). *Source:* U.S. Census Bureau Decennial Censuses, 1960 to 1980, and Current Population Survey Annual Social and Economic Supplements, 1990 to 2020

Figure 2: Probability of residing with parents relative to period preceding boomerang event. Notes: Bars represent 95 percent confidence intervals. In the period immediately before the boomerang event (t=-1), no boomerang children live with their parents, and in the period immediately following the boomerang event, all boomerang children live with their parents. Source: Authors’ calculations using data from the Health and Retirement Study. — Figure 2: Probability of residing with parents relative to period preceding boomerang event. *Notes:* Bars represent 95 percent confidence intervals. In the period immediately before the boomerang event \((t=-1)\), no boomerang children live with their parents, and in the period immediately following the boomerang event, all boomerang children live with their parents. *Source:* Authors’ calculations using data from the Health and Retirement Study.

Citation

BibTeX citation:

@article{SeiterLopezSlavov:2025,
    title = {Boomerang Children and Parental Retirement Outcomes},
    author = {Seiter, Grant M. and Lopez, Mary J. and Slavov, Sita Nataraj},
    year = {2025},
    journal = {Review of Economics of the Household},
    volume = {23},
    number = {1},
    pages = {31--69},
    doi = {10.1007/s11150-024-09707-8}
}

For attribution, please cite this work as:

Seiter, Grant M., Mary J. Lopez, and Sita Nataraj Slavov. 2025. "Boomerang Children and Parental Retirement Outcomes." Review of Economics of the Household 23 (1): 31–69. https://doi.org/10.1007/s11150-024-09707-8.

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