Does Leaving Home Make You Poor? Evidence from 13 European Countries

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may ABSTRACTThis paper examines the extent to which the relationship between leaving home and entry into poverty among young people is causal: that is, how far poverty entry is the result of leaving home, rather than arising from heterogeneity or selection. Using propensity score matching, we estimate the effect of home-leaving on entry into poverty and deprivation, with data from the European Community Household Panel. We find that leaving home does have a causal effect on poverty entry, particularly in Scandinavian countries; cross-national differences are partly, but not fully, explained by differences in destinations on leaving home. NON-TECHNICAL SUMMARYPrevious work in the area of youth poverty has found a strong link between young people's living arrangements and the incidence of poverty. Young people who have left home are more likely to be poor than those who remain living with their parents, and of all the events likely to trigger entry into poverty, the home-leaving event is the most important. Research across the 15 countries of the preenlargement European Union has found that the relationship between home-leaving and poverty is rather modest in Southern European countries (where home-leaving occurs relatively late) but very strong in the Scandinavian countries (where it occurs much earlier).However, it is not clear from previous research whether the observed relationship between homeleaving and poverty is causal (that is, that leaving home causes poverty) or whether it arises as the result of selection. For example, if young people with a certain set of characteristics (such as low educational levels), which pre-disposed them to becoming poor, were more likely to leave home early than other youngsters, we would observe a relationship between home-leaving and poverty, without the home-leaving event actually causing the poverty.This paper uses a statistical estimation technique known as propensity score matching to examine these issues of causality. Under this technique, individuals who are observed to leave home in a particular year are matched with individuals who are identical, or almost identical, on a wide range of characteristics (sex, age, employment status, educational levels, income, family structure, and so on) except that these matched individuals did not leave home in that year. The difference between the two matched samples gives an estimate of the degree to which home-leaving "causes" poverty.O...

Modelling State Dependence and Feedback Effects between Poverty, Employment and Parental Home Emancipation Among European Youth

“…[FIGURE 1 AROUND HERE] As already well documented in the literature, the most striking differences in the youth poverty rates before and after emancipation are found in Nordic countries while the least in the Mediterranean ones (see Aassve et al, 2005;Mencarini, 2006 andAassve et al, 2007).…”

“…Using propensity score matching techniques and with a sample of 13 European countries, Aassve et al (2007) confirm that residential emancipation strongly increases the risk of poverty entry in those countries where leaving home occurs early as in Denmark or Finland. The same is not true for countries where emancipation is delayed.…”

“…The relationship between leaving the parental home and poverty entry is further studied in Aassve et al (2007) and Parisi (2008). Using propensity score matching techniques and with a sample of 13 European countries, Aassve et al (2007) confirm that residential emancipation strongly increases the risk of poverty entry in those countries where leaving home occurs early as in Denmark or Finland.…”

“…30 In Aassve et al (2007) it is argued that Nordic youth perceive that the time in economic hardship will be short given the dynamism of youth labour markets and the generosity of the Welfare States and thus emancipation is the result of a rational decision.…”

Poverty and living arrangements among youth in Spain, 1980-2005

“…The relationship between poverty entry and residential emancipation is again studied in Aassve et al (2007) for 13 European countries. Using propensity score matching techniques, they confirm that, indeed, in those countries where leaving home occurs early, the extra risk of poverty associated with this event is higher, while the contrary is true in countries where leaving home occurs late.…”