Young adults leaving the nest: The role of the cost of living

Table 7.1 presents summary statistics for the full sample of 3.6 million young adults and also breaks out the sample by census year and whether the individual is over or under age twenty-five. On average, 55 percent of young adults lived in "independent" arrangements, but there was a ten-percentage-point drop between 1980 and 2000, with roughly equal percentage-point rises in economic living arrangements and non-independent arrangements. Age plays a critical factor: Those age twenty-five to thirty-four are nearly fifty percentage points more likely to be living independently than those age eighteen to twenty-four (72 and 25 percent, respectively). More than half of the sample is female, and nearly 70 percent are white. A number of characteristics changed over the twentyyear horizon. For example, the percentage of individuals of Hispanic ethnicity doubled from 8 to 17 percent. The number of dropouts remained fairly constant at about 17 percent, but there was a decrease in individuals with a high school diploma, from 32 to 24 percent, and an increase in individuals with at least some college, from 51 to 59 percent. By 2000 nearly one-quarter of young adults were still enrolled in school. Therefore, a shift from high school to college educational attainment between 1980 and 2000 is evident both in terms of years of schooling and school enrollment. Individual annual earnings (which includes nonworkers) rose in real terms, from $18,000 to $22,000, between 1980 and 2000, and the unemployment rate fell from 7.2 to 4.1 percent. The percentage who were U.S. citizens declined from 94 percent to 87 percent, and the percentage who were married fell from 48 percent to 41 percent. Mobility increased dramatically over this period. The fraction who had lived in the same state five years earlier fell from one-half to one-third. Over the entire period, the median house price was $157,320. It rose in real terms between 1980 and 1990 and then declined.11 The monthly housing payment-which accounts for credit market conditions and tax deductibility and also keeps housing quality constant-fell dramatically, from $1,476 to $1,092, a 26 percent drop.12 In contrast, monthly rental payments rose slightly during this period, from $726 to $741. Commuting time increased from twenty-three to twenty-seven minutes, but there was no clear trend in child care costs.