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Modelling State Dependence and Feedback Effects between Poverty, Employment and Parental Home Emancipation among European Youth

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  • Sara Ayllón

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

  • Sara Ayllón, 2009. "Modelling State Dependence and Feedback Effects between Poverty, Employment and Parental Home Emancipation among European Youth," SOEPpapers on Multidisciplinary Panel Data Research 235, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp235
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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. Eerola, Essi & Lyytikäinen, Teemu, 2015. "On the role of public price information in housing markets," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 74-84.
    3. Pfeiffer, Friedhelm & Seiberlich, Ruben R., 2009. "A socio-economic analysis of youth disconnectedness," ZEW Discussion Papers 09-070, ZEW - Leibniz Centre for European Economic Research.
    4. Maria Petmesidou & Periklis Polyzoidis, 2015. "What Policy Innovation For Youth in the Era of Prolonged Austerity? The Case of Greece," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 9(2), pages 35-77, December.
    5. Raluca Iorgulescu, 2014. "Poverty, Well-Being And Sustainable Development: Official And Experimental Measures In Postmodern Societies," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 34-41, February.
    6. Ossi Korkeamäki & Tomi Kyyrä, 2012. "Institutional rules, labour demand and retirement through disability programme participation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 439-468, January.

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    More about this item

    Keywords

    Youth poverty dynamics; trivariate multinomial probit; state dependence; feedback effects; unobserved heterogeneity;
    All these keywords.

    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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