Staying close to home could be the smartest financial decision American millennials make

Trying to convince your parents to let you move into their basement? Here’s some data that might help.

A new study from the Federal Reserve Bank of Cleveland that looked at 45 years of earnings data, shows that young people who lose a job but are still living fairly close to their parents rebound much more quickly.

That’s presumably because they are able to rely on help from their families for basic things during a time of difficulty or transition. (Another possible explanation — mum’s nagging to ‘stop playing x-box and get a job’ is a potentially great motivator to pick up the pieces.)

“We find post-job-loss earnings recovery is faster for young adults who live near their parents than for young adults who live farther away,” the Cleveland Fed paper says.

“This positive effect diminishes gradually as the distance to one’s parents increases. Most of the effect is driven by higher wages after job displacement, not by differences in the number of hours worked.”

The effect is absent for older workers who may be caring for elderly parents, the study finds.

NOW WATCH: You should never wash your jeans — here’s how to clean them

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.