Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/62351 
Year of Publication: 
2012
Series/Report no.: 
IZA Discussion Papers No. 6651
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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.
Subjects: 
rental subsidy
conditional cash transfer
youth emancipation
family formation
fertility
JEL: 
J1
H2
I3
Document Type: 
Working Paper

Files in This Item:
File
Size
279.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.