The Economic Downturn and the Family: Moving in, Moving Out and Financial Well-Being

Juyeon Kim, NORC at the University of Chicago
Linda Waite, University of Chicago

The normal life course suggests that households at older age reduce their size and complexity due to nest-leaving and widowhood. However, The Great Recession increased economic stressors, heightening coresidence. This study examines the effect of economic strain on changes in household composition and the effect of these changes on the economic well-being of older adults. We used two waves (2005 and 2010) of panel data from the National Social Life, Health and Aging Project (NSHAP) to examine the relationship between changes in household size and complexity and financial well-being among older adults. We found that 32% of respondents experienced either an increase or decrease in household complexity. Decreased complexity or size was associated with an increase in household income in 2010. Black and Hispanic households were more likely to undergo changes and experience decreased financial well-being. Decreased household complexity improves financial well-being, especially among Blacks and Hispanics.