The Celtic Tiger and home leaving among Irish young adults

Abstract

This paper examines the effect of local economic growth on whether young adults move out of the parental home to form new households-an important milestone in the transition to adulthood. I use the placement of foreign direct investment during the Celtic Tiger, the large economic expansion in Ireland during the 1990s, to estimate the impact of local job growth on the likelihood that young adults leave home. This paper contributes to the literature by exploiting an exogenous shock to the local labor market to identify the main effect of employment growth on home leaving behavior. The results show that local economic growth increases the probability that young adults leave home particularly for the welleducated young adults most likely to be employed in the factories that opened during the period.

Living Arrangements of Mothers and Their Adult Children Over the Life Course

“…Most studies focus on the effect of the economic conditions of the child in determining these living arrangements. The evidence shows that increases in children’s income (Aassve, Billari, & Ongaro, 2001; Ermish, 1999) and more favorable local economic conditions (Card & Lemieux, 1997; Matsudaira, 2016; Wiemers, 2014a) are associated with a higher probability of young adult children living independently of their parents, while unemployment for children predicts moving back in with parents (Kahn et al, 2013; Kaplan, 2012; Wiemers, 2014b). Somewhat surprisingly, several studies suggest that increases in parental income are associated with increases in coresidence (Ermisch, 1999; Manacorda & Moretti, 2006; Schwartz et al, 1984).…”

The parental home as labor market insurance for young Greeks during the Great Recession

“…(2010), Chiuri and Del Boca (2010), Engelhardt et al . (2019)]; and broader market conditions and economic recessions [Card and Lemieux (2000), Lee and Painter (2013), Bitler and Hoynes (2015), Matsudaira (2016), Wiemers (2017)]. It is noteworthy however that there is yet no consensus on whether the economic effect is meaningfully large [compare, for example, the recent evidence from US data by Lee and Painter (2013), Bitler and Hoynes (2015), and Matsudaira (2016)] or in the expected direction [see Ahn and Sanchez-Marcos (2017) for evidence of procyclical coresidence in Spain].…”

“…Empirical studies centered in urban and real estate economics, economic demography, or labor economics have focused on different determinants of living arrangements, but they are closely interconnected and mostly confirm or complement each other. All else equal, these studies have shown that living arrangements respond to cultural norms [Giuliano (2007)] and a number of economic factors, including house and rental prices [Börsch-Supan (1986), Haurin et al (1993), Ermisch and Di Salvo (1997), Ermisch (1999)]; labor outcomes and income of parents and adult children [Manacorda and Moretti (2006), Becker et al (2010), Chiuri and Del Boca (2010), Engelhardt et al (2019)]; and broader market conditions and economic recessions [Card and Lemieux (2000), Lee and Painter (2013), Bitler and Hoynes (2015), Matsudaira (2016), Wiemers (2017)]. It is noteworthy however that there is yet no consensus on whether the economic effect is meaningfully large [compare, for example, the recent evidence from US data by Lee and Painter (2013), Bitler and Hoynes (2015), and Matsudaira (2016)] or in the expected direction [see Ahn and Sanchez-Marcos (2017) for evidence of procyclical coresidence in Spain].…”

The Effect of Unemployment on Household Composition and Doubling Up

“…Substantial evidence suggests that for young adults, higher income and lower local unemployment are associated with decreases in coresidence with parents (Assave et al 2002; Card and Lemieux 1997; Ermisch 1999; Iacovou 2010; Kaplan 2012; Manacorda and Moretti 2006; Matsudaira 2010; Wiemers 2014). Although increases in income among young adults increase the probability of leaving the parental home, increases in parental income are not clearly related to children living independently (Ermisch 1999; Iacovou 2010; Manacorda and Moretti 2006).…”