The Impact of Income and Occupational Status on Leaving Home: A Comparative Analysis Using the European Community Household Panel

Arnstein Aassve, Max Planck Institute for Demographic Research
Stefano Mazzuco, University of Padova
Fausta Ongaro, University of Padova

We use three waves from the European Community Household Panel to analyze the impact of employment, earnings, household income, and welfare receipts on young adults' decision to leave the parental home. In particular we investigate the importance of these income sources in different welfare settings. We use a simultaneous equation approach to control for unobserved heterogeneity. This is important given that the ECHP does not include retrospective information on demographic events. We find employment and income to be very important for young adults in the Southern European Welfare State. For the Continental European Welfare State the results are less clear and there are significant variations. In the Scandinavian Social Democratic Welfare State the effect of employment and income appears negligible. The effect is also modest in the UK (the Liberal Market State), a feature we attribute to the educational system.