TFT: What are the consequences of this? In some ways, can parents be trapping their kids?

KN: It can be worrying, and they do sometimes worry that they are making it too easy for their kids not to grow up and face the music. And the music is pretty harsh right now in the labor market. Parents do often wonder if they are making a mistake by cushioning that transition too long or too much. There's no road map for this, and Americans are particularly bad at social situations that lack a road map. There is a certain amount of anxiety. Even when people find themselves enjoying this station of life, they wonder if they should be.

TFT: What about future consequences? If more jobs are in the cities, are people not getting job opportunities because they're at home, or maybe they're not meeting someone to marry because they're home all the time?

KN: There are certainly consequences that may not have been thought out if people stay home for a longer time. If you marry when you're a woman of 32 or 33, well you're not going to have four children. Biologically that's not going to happen. People are having smaller families. And they're going to be older when their children are born and that has consequences as well.

In the U.S., we don't have a serious fertility problem because we have a significant immigrant population, which tend to have larger families. But if you subtracted the immigrants, we wouldn't look all that different from countries that are now suffering the consequences of very, very low fertility, which usually means lower productivity. There are parts of this country where you can see very similar outcomes to what's happening in Japan. There are a gazillion ways these demographic dynamics change the social landscape.

TFT: If this generation, who has lived with their parents and always had a support system, fall on hard times, how are they going to deal with it? How could this affect them psychologically?

KN: Psychologically it will be difficult, and materially it will be difficult. Young people won't get into the housing market because they can't. They won't accumulate equity like earlier generations did. They won't have the resources to help their parents when they're elderly. They're going to be waiting for an inheritance which may not be there. The whole run-up to that accumulation that defined middle class life in the past will not happen, or won't happen in the same way. My parents bought their first house when they were 23 and 25. I bought my first house when I was nearly 30. I don't think my children will be in the homeownership market until they're closer to mid-30s or older. In a system like ours, where so much of a family's wealth is tied up in housing, that affects the overall wealth profile and distribution across the country. And that matters for everything -- retirement, helping the older generation, affording a college education -- there's virtually no aspect of American material life that's left unaffected by this.

TFT: Has the stigma gone away in the U.S.?

KN: Not entirely. The lingering evidence in the stigma is in the sort of discomfort that people have. But I do think that it's starting to wear away and that's because it's such a widespread experience. Today 85% of college graduates have either come home or have stayed home.

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TFT: On the plus side, if these boomerang kids do become financially established, will they then return the favor and invite their parents to live out old age with them?

KN: I do. I think they will be in many ways closer to their parents than previous generations. And we are seeing a lot more elective family consolidation, people who are deciding that it's financially prudent for the generations to live together, for the grandparents to help raise grandchildren, etc. A developer in California has decided there's a huge market in houses that have what he calls "granny apartments " inside them. He's marketing a whole form of real estate that hadn't really existed before.

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