Rising housing costs are a primary reason why prime-aged men are dropping out of the labor force.
The decline in male employment is usually blamed on disappearing factory jobs or lack of skills. This research shows that as rent prices skyrocket, the 'free housing' provided by parents becomes a more valuable subsidy than a low-wage paycheck, effectively incentivizing men to choose living at home over working.
Housing Costs, Parental Resources, and Declining Male Labor Force Participation
SSRN · 6429759
Prime-aged male labor force participation in the U.S. has declined substantially over the past sixty years, with the sharpest falls among men without a college degree. Over the same period, the share of men living with parents has doubled. I develop a dynamic lifecycle model in which young men make employment and coresidence decisions. The parental home serves as a consumption floor that reduces the returns to working, and rising housing costs make this fallback increasingly valuable relative to