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Boomerang children and parental retirement outcomes

Author

Listed:
  • Grant M. Seiter

    (University of Virginia)

  • Mary J. Lopez

    (Occidental College)

  • Sita Nataraj Slavov

    (George Mason University
    National Bureau of Economic Research)

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.

Suggested Citation

  • Grant M. Seiter & Mary J. Lopez & Sita Nataraj Slavov, 2025. "Boomerang children and parental retirement outcomes," Review of Economics of the Household, Springer, vol. 23(1), pages 31-69, March.
  • Handle: RePEc:kap:reveho:v:23:y:2025:i:1:d:10.1007_s11150-024-09707-8
    DOI: 10.1007/s11150-024-09707-8
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    More about this item

    Keywords

    boomerang children; parental retirement readiness; wealth; health; life satisfaction;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • I1 - Health, Education, and Welfare - - Health
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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