You don’t have to live with mom and dad, but if you lose your job, it pays to live near them.
Young adults with children see faster earnings recoveries after job loss when they live closer to their parents than those who live farther away, according to a study released this week by the Federal Reserve Bank of Cleveland. On average, those who live near their parents see a full recovery in earnings within 10 years of job displacement, the researchers found.
One theory: Parents can help their adult children with child care. There was no real difference of earnings recovery between young adults without children living close to their parents and young adults with children living farther away.
Parents may also assist in finding their kids a new job or even provide moral support, though researchers saw weaker evidence to support that influenced salary at their children’s new job. However, the Federal Reserve found slight connections between young adults working in their parent’s industries after a job loss when they live close to home.
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The study used annual data of 20,000 workers between 25 and 35 years old who lost their jobs through no fault of their own and were working full-time for their employers for at least two years prior to displacement. They were taken from the University of Michigan’s Panel Study of Income Dynamics between 1968 and 2013.
Young adults’ parents can save their children a lot of money by taking care of the kids while they look for jobs or start new ones. American parents on average spend $233,610 on raising children costs between birth and age 17, for housing, food, babysitting and transportation costs and not college.
In some cities, the cost of babysitting can be more than the average rent. The average cost of care for one child for 40 hours a week in New York City is $17.50 an hour, or more than $3,000 a month, according to child-care website Care.com. Comparatively, the average rent for a two-bedroom apartment is $2,600 in Brooklyn and $3,662 in Manhattan.
Also see: The 5 states where child care is least affordable
Not everyone has the luxury of living close to family. One in four parents aged 50 and older don’t have any children living within an hour’s drive. In fact, 40% of those parents have children living more than five hours away. The distance diminishes satisfaction in family relationships, survey respondents said.
Still, it doesn’t always make financial sense to live near mom and dad. Workers who move far away are more likely to embrace other distant job opportunities, the researchers found, and people with jobs who initially lived close to their parents earned far less than those young adults with jobs living farther away.
Living close to family also doesn’t secure the gift of parents paying rent. According to the data, parents who gifted their young adult children rent money around a job loss were both close and far away from their offspring, and rent savings only increased by about $150 per year for both groups.
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