leaving home: independence, togetherness and income in europe

Leaving home: independence, togetherness and

income in Europe

Maria Iacovou

2

Series of transitions:Finishing schoolGetting a jobLeaving homePartneringHaving children

Sequencing, and transitions themselves, not universal.Argument for expanding definition of youth upwards

The transition to adulthood

4

Motivation

Trend towards later home-leaving in OECD countriesConceptualised as being caused by adverse events

Unemployment, insecure employment, low incomes, etc

And as having adverse consequencesLack of independence for offspring (and parents)Financial consequences for parents

[Neither of these is necessarily true]

5

All analysis (some from previous publications, some new) from large-scale cross-national data sets European Community Household Panel (ECHP)

1996 – 2002: EU-15European Union Statistics on Income and Living Conditions (EU-SILC)

2004 onwards: EU-27

Data

6

“North/Western” cluster: UK, France, Germany, Austria, Belgium, Netherlands, Luxembourg, Ireland

7

“Nordic” cluster: Sweden, Finland, Denmark, Norway


8



“Southern” cluster: Greece, Italy, Spain, Portugal, Cyprus, (Malta)

9



“Southern” cluster: Greece, Italy, Spain, Portugal, Cyprus, (Malta)

“Eastern” cluster:Estonia, Latvia, Lithuania, Poland, Czech R, Slovakia, Slovenia, Hungary, Romania, Bulgaria

10

“Nordic” cluster: Sweden, Finland, Denmark, Norway, Netherlands

“North/Western” cluster: UK, France, Germany, Austria, Belgium, Luxembourg

“Southern” cluster: Greece, Italy, Spain, Portugal, Cyprus, (Malta), Ireland

“Eastern” cluster 1:Estonia, Latvia, Lithuania, Czech R, Hungary

“Eastern” cluster 2:Poland, Slovakia, Slovenia, Romania, Bulgaria

Incomes lower than (eg) Turkey, Mexico, Chile, Malaysia

11

Variations in the age at leaving home

DK FI SENL FR UK DE EE AT BE

LT LU IE LV RO BG HU CY CZPL ES IT EL SI SK PT

18

20

22

24

26

28

30

32

34

36

38

Men

Women

Source: Adapted from Iacovou and Skew (2010)

12

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

Living with parents

Left home, living with partner

Left parental home, no partner

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40


Living with parents


0%

20%

40%

60%

80%

100%

15 20 25 30 35 40


Living with parents

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

Living with parents


Living with parents and

partner

Leaving home by age: four countries (men)

Denmark

Bulgaria

Germany

Italy

Source: new analysis of EU-SILC (2007)

13

Denmark: men (top) and women (b0ttom)

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

Living with parents



0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

14

Germany: men (top) and women (b0ttom)

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40


Living with parents


0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

15

Italy: men (top) and women (b0ttom)

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40


Living with parents

16

Bulgaria: men (top) and women (b0ttom)

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

Living with parents


Living with parents and

partner

0%

20%

40%

60%

80%

100%

15 20 25 30 35 40

17

Economic factors – income sufficiency, job securityInstitutional factors – eg, welfare stateHousing markets – supply, price, mortgage marketsSocial normsFamily ties

Why does home-leaving vary so much?

18

Independence = ability to make your own decisions, support yourself financially, spend time alone…Togetherness = sense of kinship / belongingAssume everyone values both to some extentNot mutually exclusive, but trade-offs for young adultsReher (1998): “Northern” European model characterised by weak family ties; “Southern” model of “strong” family ties

“Independence” and “togetherness”

19

CAN’T assume that societies where young adults live with their parents are those with “strong” family ties or a preference for “togetherness”Look at the relationship between income and home-leaving

“Independence” and “togetherness”

Higher incomes

POSITIVELY related to

earlier home-leaving

Higher incomes

NEGATIVELY related to

home-leaving

Infer preference for independence

Infer preference for togetherness

20

Distinguish between parents and children’s incomesLogit regressions separately for each group of countriesSample of young adults aged 18-35 still living at home, analyse the determinants of moving out the following yearAlso control for:

Young person’s age (and age squared)Economic activity (employed/unemployed/home and family/education)Characteristics of family of origin (two-parent/stepfamily/lone parent)Rooms per person (crowding)Parents’ education & age at marriageMaternal employment

Analytical framework

21

Results

Nordic Northern Southern

Men Women Men Women Men Women

Own income 0.011*** 0.012*** 0.004** 0.006*** 0.005*** 0.006*** Parental income 0.004* 0.005* 0.005*** 0.004*** -0.005*** -0.001

Own income positively related to leaving home.Infer preference among young adults for independence – strongest in Nordic countries

Parental income ALSO positively related to leaving home in Nordic & Northern countries.

But parental income is negatively related to leaving home in Southern countries.

Source: adapted from Iacovou (2011)

22

Distinguishing between destinations

Nordic Northern Southern Men Women Men Women Men Women Leave as a single

Own income 0.018*** 0.019*** -0.001 0.004 0.004* 0.006* Parental income 0.005 0.005 0.005* 0.012*** 0.001 0.004

Leave for partnership Own income 0.014** 0.012** 0.008*** 0.008** 0.005*** 0.005*** Parental income 0.002 0.005 0.005** -0.001 -0.006*** -0.003*

Leave for education Own income -0.001 0.004 0.002 0.005 -0.007 0.009** Parental income 0.010* 0.010** 0.007* 0.012*** -0.002 0.008**

Negative effect of parental income now apparent for both sexes in Southern countries

Source: adapted from Iacovou (2011)

23

Does the effect of income vary with age?

Answer: yes!The effect of own income does not vary significantly with ageThe effect of parental income does varyTheory: parents use their incomes to delay home-leaving when offspring are “too young”, and use their incomes to encourage home-leaving when offspring are “old enough” (or “too old”). How old is “old enough”?

About age 20 in Nordic countriesAbout age 22 in Northern countriesAbout age 27 for women in Southern countriesAbout age 35 for men in Southern countries

24

And Eastern Europe? Own income….

0.00

0.05

0.10

0.15

0.20

0.25

Nordic North South East (1) East (2)

Men Women**

**

**** *

**

****

Effect positive everywhere, but much larger in Nordic countries

Adapted from Skew and Iacovou (2011)

25

-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

Nordic North South East (1) East (2)

Men Women

*

*

**

**

And Eastern Europe? Parental income…

Effect negative in Eastern [1] group (Baltic states plus Hungary and Czech Republic)

Effect positive in Eastern [2] group (Romania, Bulgaria, Slovakia, Slovenia, Poland)

26

Returns home

0 1 2 3 4 5

Greece

Italy

Spain

Portugal

Ireland

Austria

Germany

France

Luxembourg

Belgium

UK

Netherlands

Denmark

Finland

Percentage experiencing a return home

Percentage of parents

Percentage of young people

Source: Iacovou and Parisi (2009), using data from the European Community Household Panel

27

Wide variations in age at leaving homeMany factors involved in variations – within and between countriesNorms play a rolePreferences for togetherness versus independence play a roleEconomic constraints evident, particularly across some countries of Eastern Europe

Conclusions

Who supports whom?Poverty, financial strain and intergenerational co-residence

Maria Iacovou and Maria Davia

Young people’s incomes as a % of their household’s incomes

(sample: young people aged 19-34 living with their parents)

0

5

10

15

20

25

30

LV UK IE EE ES BG CZ AT HU NL LT PT SI NO DK GR RO IS SK IT SE CY FI PL BE DE LU FR

Reasons for variation

Household sizeOne parent/two parents/other adults/children

EmploymentYouth employment ratesParents’ employment ratesEmployment of other adults in household

WagesWages of young adult in relation to parents’ wages

Benefits

DE

IE

IS

LVUK

FR

15

17

19

21

23

25

27

29

20 30 40 50 60 70

mea

n %

h/h

inco

me

from

YP

% with 2 parents in paid work

DE

IE

IS

LU

LVUK

FR

15

17

19

21

23

25

27

29

30 35 40 45 50 55

mea

n %

h/h

inco

me

from

YP

% with 1 parent in paid work

DE

IE

IS

LVUK

FR

15

17

19

21

23

25

27

29

0 5 10 15 20 25 30 35

mea

n %

h/h

inco

me

from

YP

% with no parent in paid work

CY

DE

IE

LU

LVUK

FR

15

17

19

21

23

25

27

29

10 20 30 40 50

mea

n %

h/h

inco

me

from

YP

% living with one parent only

Do the level of earnings, as well as having a job, matter?

DE

IE

IS

LVUK

FR

15

17

19

21

23

25

27

29

35 45 55 65 75 85

mea

n %

h/h

inco

me

from

YP

% of young people who have a job

DE

IE LVUK

FR15

17

19

21

23

25

27

29

20 30 40 50 60 70 80 90

mea

n %

h/h

inco

me

from

YP

mean youth LAH earnings as % of fathers' earnings

do we observe this pattern just because of age differences between the young people still living at home?

Both the age distribution AND age-earnings profiles contribute to differences in earnings

DE

IELV

UK

FR

15

17

19

21

23

25

27

29

20 30 40 50 60 70 80 90

mea

n %

h/h

inco

me

from

YP

mean youth LAH earnings as % of fathers' earnings

DE

IELV

UK

FR

15

17

19

21

23

25

27

29

22 23 24 25 26 27

mea

n %

h/h

inco

me

from

YP

mean age of young person LAH

DE

EE

IELV

PL

SI

UK

FR

15

17

19

21

23

25

27

29

40 60 80 100 120

mea

n %

h/h

inco

me

from

YP

Earnings of 23-28 as % of earnings of 50-55

0

5

10

15

20

25

30


0

30


Scandinavian countries: many 2-earner parents; low-ish youth employment rate, low youth earnings

Including predicted levels………….

0

5

10

15

20

25

30


0

30


North/Western countries: fairly low % with jobs (except AT and NL!), low youth earnings (again, except AT and NL)


0

5

10

15

20

25

30


0

30


Low % of 2-worker parents, high % with jobs, fairly high % with only 1 parent.


High employment and relative earnings; high % lone parents

These figures cover entire income range

Are there differences between rich and poor households?Expect young people in wealthier households to “contribute” a lower % of the household’s income

0

5

10

15

20

25

30

NO IS DK SE FI

< 75% median income

75-100% median income

> 100% median income

0

5

10

15

20

25

30

LV EE BG CZ HU LT SK RO SI PL

< 75% median income



0

5

10

15

20

25

30

ES PT CY GR IT

< 75% median income



0

5

10

15

20

25

30

35

IE NL UK AT DE LU BE FR

< 75% median income



Omitted material... Multivariate analysis of characteristics associated with high

% of incomes

YPs’ role in determining poverty status

Calculate household income and poverty statusCounterfactual: “remove” young person and all the income associated with their presence in the householdCalculate counterfactual poverty status of householdAllocate hypothetical benefits to young person and calculate their counterfactual poverty statusEight possible sets of outcomes

% of households below 75% median

0

1

2

3

4

5

6

7

8

9

10

SE IS FR LU FI BG CZ NO NL BE RO SK PL HU CY DK EE LT IT PT SI DE UK LV AT IE GR ES

Not poor - would be poor if YP left Poor - wouldn't be poor if YP left

The issue of sharingAdult children don’t always share their funds with the rest of their householdsBut we can assess the extent to which children contribute to household coffers, as follows:HS120: describe your ability to make ends meet

6-point scale, from “great difficulty” to “very easily”. Generate a variable indicating year-on-year changeTake a sample of households with young adults co-resident with parents in year tGenerate variable indicating if young people leave homeMultinomial regressions of change in making ends meetDefine 3 outcomes: worse – same – better

What do we expect?YP with job leaves YP without job leaves

Get worse+

household loses YP’s income which they previously shared

ORN/S if YP was not sharing

their income

+ if those remaining in the

household have to continue subsidising the YP

Stay the same

- -

Improve+

if the household were already subsidising the YP

+ if those remaining in the

household no longer have to subsidise the YP

ORN/S if those remaining in h/h still

have to subsidise the YP

Marginal effects: all countries pooled(sample of households with YP aged 25-25)

YP with job leaves YP without job leaves

Get worse 5.8% *** -2.4% ***

Stay the same

- -

Improve 0.1% n/s 4.9% ***

By country groups:YP with job

leavesYP without job leaves

Nordic Get worse 8.5 * 3.6Improve 2.9 7.6 *

North/West Get worse 3.5 -7.0 ***Improve - 0.7 4.8 *

Southern Get worse 7.2 *** 0.5Improve -0.2 6.1 ***

Eastern Get worse 4.0 *** -4.0 ***Improve 1.0 3.8 ***

Next steps

Already:Looked at age of young person: no systematic differences between 25-29s and 30-35sNo difference between men and women, once you control for income

Control for contemporaneous changes in Income of other family membersHousehold compositionYP getting or losing a job but remaining in household

Assess the % of YPs’ income which is “shared”

Look (cross-sectionally) at the relationship between YPs’ incomes and parents’ subjective assessments.

Conclusions

Economic support between young people and their families is not all one wayYoung people’s incomes do contribute, in some meaningful way, to their families’ sense of financial securityThe degree of this contribution is strongly related to young people’s incomes and labour market status

leaving home: independence, togetherness and income in europe

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