The Increasing Financial Dependency of Young People on their Parents

It is commonly mentioned in the youth policy literature that the financial dependency of young people on their parents is increasing and that this is likely to have an adverse effect on the well-being of young people, their families and the community in general. Possible consequences include lower living standards for young people and their families, family conflict, homelessness, crime and political cynicism. Reasons for the increase in young peoples’ dependency include reductions in the availability of full-time work, greater participation in school and tertiary education and changes to government income support. To date, however, evaluation of the extent to which financial dependency has increased, for whom and when has been fragmented and limited by the data used. This paper aims to address this deficit by measuring the increase in financial dependency of young people in Australia using available published information from 1943 onwards and confidentialised unit record file information from the Income Distribution Surveys conducted by the Australian Bureau of Statistics between 1982 and 1996. The main findings are that dependency has increased substantially since the late 1960s and changes over the last 14 years have been particularly great for young people aged 15 to 20 years. Changes for this group are largely the result of increased participation in education and lower employee incomes. Further changes may occur as a consequence of changes to remuneration for young people which is currently under review by Australian Industrial Relations Commission