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Fostering the Emancipation of Young People: Evidence from a Spanish Rental Subsidy

Author

Listed:
  • Aparicio Fenoll, Ainoa

    (University of Turin)

  • Oppedisano, Veruska

    (University of Westminster)

Abstract

In 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.

Suggested Citation

  • Aparicio Fenoll, Ainoa & Oppedisano, Veruska, 2012. "Fostering the Emancipation of Young People: Evidence from a Spanish Rental Subsidy," IZA Discussion Papers 6651, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6651
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. La emancipación con recortes rápidos y reformas a medio gas
      by Florentino Felgueroso in Nada Es Gratis on 2012-07-27 04:56:04

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    Cited by:

    1. Ainhoa Aparicio-Fenoll & Veruska Oppedisano, 2016. "Should I stay or should I go? Sibling effects in household formation," Review of Economics of the Household, Springer, vol. 14(4), pages 1007-1027, December.
    2. María Cervini-Plá, 2015. "Intergenerational Earnings and Income Mobility in Spain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 812-828, December.
    3. Olga Cantó & Inmaculada Cebrián & Gloria Moreno, 2019. "Household precariousness and youth living arrangements in Spain: evidence for a complete business cycle," Working Papers 499, ECINEQ, Society for the Study of Economic Inequality.
    4. Raul-Tomas Mora-Garcia & Maria-Francisca Cespedes-Lopez & V. Raul Perez-Sanchez, 2022. "Housing Price Prediction Using Machine Learning Algorithms in COVID-19 Times," Land, MDPI, vol. 11(11), pages 1-32, November.
    5. 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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    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

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