Migration Choices of the Boomerang Generation: Does Returning Home Dampen Labor Market Adjustment?

This paper documents a linkage between two empirical trends: the low levels of out-migration from weak labor markets, and the increasing rate at which young adults return to live with their parents (‘boomerang’). Using the American Community Survey, we show that boomerang moves are more likely to bring young adults to labor markets with higher unemployment and lower wages. Using the geocoded Panel Study of Income Dynamics and a locational choice model, we find that the likelihood of a non-boomerang location being chosen by a young adult increases with local wages. However, for boomerang moves, wages have zero or a much smaller effect on the selection of locations, and the likelihood that a boomerang location is selected actually increases with the location’s unemployment level. This positive correlation with unemployment is substantive in magnitude and is highest for those without a college degree and for non-whites.