Fostering the Emancipation of Young People: Evidence from a Spanish Rental Subsidy
AbstractIn Southern Europe youngsters leave the parental home significantly later than in Northern Europe and United States. In this paper, we study the effect of a monthly cash subsidy on young adults' emancipation, family formation, and fertility. The subsidy, introduced in Spain in 2008, is conditional on young adults renting accommodation, and it amounts to almost 20 percent of the average youngsters' wage. Our identification strategy exploits the subsidy eligibility age threshold to assess the causal impact of the cash transfer. Difference-in-Differences and Regression Discontinuity estimates show that the policy increases emancipation rates by 0.9-2.3 percentage points, couple cohabitation by 1.2-2.4 percentage points, and the probability of having children by 4.8-8.1 percentage points for 22 year-olds compared to 21 year-olds. The effect is larger among young adults earning lower incomes and living in high rental price areas. This is consistent with the hypothesis that youngsters delay emancipation and family formation because they are budget constrained.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6651.
Length: 34 pages
Date of creation: Jun 2012
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Find related papers by JEL classification:
- J1 - Labor and Demographic Economics - - Demographic Economics
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-01 (All new papers)
- NEP-DEM-2012-07-01 (Demographic Economics)
- NEP-EUR-2012-07-01 (Microeconomic European Issues)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- La emancipación con recortes rápidos y reformas a medio gas
by Florentino Felgueroso in Nada Es Gratis on 2012-07-26 23:56:04
- Arnstein Aassve & Elena Cottini & Agnese Vitali, 2013. "Youth Vulnerability in Europe during the Great Recession," Working Papers 057, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
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