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Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth

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  • Ayllón, Sara

Abstract

Youth is one of the phases in the life-cycle when some of the most decisive life transitions take place. Entering the labour market or leaving parental home are events with important consequences for the economic well-being of young adults. In this paper, the interrelationship between employment, residential emancipation and poverty dynamics is studied for eight European countries by means of an econometric model with feedback effects. Results show that youth poverty genuine state dependence is positive and highly significant. Evidence proves there is a strong causal effect between poverty and leaving home in Scandinavian countries, however, time in economic hardship does not last long. In Southern Europe, instead, youth tend to leave their parental home much later in order to avoid falling into a poverty state that is more persistent. Past poverty has negative consequences on the likelihood of employment.

Suggested Citation

  • Ayllón, Sara, 2009. "Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth," Working Papers 10, VATT Institute for Economic Research.
  • Handle: RePEc:fer:wpaper:10
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    Cited by:

    1. Carlos Gradín & Olga Cantó, 2009. "Why are child poverty rates so persistently high in Spain?," Working Papers 123, ECINEQ, Society for the Study of Economic Inequality.
    2. Pfeiffer, Friedhelm & Seiberlich, Ruben R., 2009. "A socio-economic analysis of youth disconnectedness," ZEW Discussion Papers 09-070, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    Youth poverty dynamics; trivariate multinomial probit; state dependence; feedback effects; unobserved heterogeneity; Income distribution; Tulonjako; International comparisons; Kansainväliset vertailut; Labour market; Työmarkkinat; Labor market and policies promoting economic growth; Työmarkkinat ja kasvua tukeva politiikka; C330 - Econometric Methods: Multiple/Simultaneous Equation Models; Multiple Variables: Models with Panel Data; I320 - Measurement and Analysis of Poverty; J130 - Fertility; Family Planning; Child Care; Children; Youth;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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