Association for Public Policy Analysis & Management

In a recent paper assessing the housing transitions that occur late in life (Herbert, McCue and Marya, 2014), a surprising finding was that 20 percent of respondents in the Health and Retirement Survey (HRS) who were age 75 or older lived with other family members—twice as common as living on one’s own as a renter.  In roughly three-quarters of these situations the survey respondent is the householder or spouse of the householder, while in the remaining cases either a relative or non-family member is the householder or the respondent lives rent free in a home owned by someone else, including accessory units. Those living with others are similar to renters in a number of dimensions, including age, rating of overall health, and incidence of limitations on activities of daily living. Importantly, those living with others were the least likely of those living in community (that is, not in housing with services such as assisted living or a nursing home) to transition into housing with services.  This lower rate of transition likely reflects the fact that living with others was an affordable means of obtaining needed supportive services.  In fact, in response to a health shock homeowners were more likely to transition into a situation where they live with others than into housing with services, usually entailing a family member moving into the older relative’s home. This option is also most likely to be exercised by those with lower levels of wealth and those experiencing high housing cost burdens. 

However, while this paper identified this living situation as a significant option among older adults, it raised more questions than answers about the timing of these transitions in old age, the relative importance of financial versus health factors, and the length of time that these arrangements persist. To the extent that these moves have been precipitated by financial stresses, the increasing share of older homeowners carrying mortgage debt into retirement may put increased pressure on children and other relatives to live with older individuals as a means of addressing their needs for assistance.  (Or there may also be cases where the moves are precipitated by the financial needs of adult children.) There are also questions about whether these arrangements are more likely with larger numbers of children providing more opportunity for living partners. With declining family sizes, these arrangements may become less common in the future, increasing demand for housing with services. 

This paper will use the HRS to examine the rate of transitions into intergenerational living arrangements among individual age 50 and above, examine the financial, health, and demographic factors associated with the initiation of these arrangements, and assess the length of time that the intergenerational living situations persist for.