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Review of Economics of the Household

, Volume 15, Issue 2, pp 497–525 | Cite as

Living arrangements in Europe: whether and why paternal retirement matters

  • Luca Stella
Article

Abstract

This paper uses retrospective micro data from eleven European countries to investigate the role of paternal retirement in explaining children’s decisions to leave the parental home. To assess causality, I use a bivariate discrete-time hazard model with shared frailty and exploit over time and cross-country variation in early retirement legislation. Overall, the results indicate a positive and significant influence of paternal retirement on the probability of first nest-leaving of children residing in Southern European countries, for both sons and daughters. Focusing on Southern Europe, I find that the increase in children’s nest-leaving around the time of paternal retirement does not appear to be justified by changes in parental resources. Rather, channels involving the supply of informal child care provided by grandparents or the quality of the home should be the focus of study.

Keywords

Living arrangements Retirement Pension reforms  SHARE 

JEL Classification

J13 J26 J01 

Notes

Acknowledgments

I am grateful to Daniele Paserman and Guglielmo Weber for guidance at each stage of this paper. I thank Viola Angelini, Laura Salisbury, Marco Albertini, Silvia Balia, Erich Battistin, Massimiliano Bratti, Alessandro Bucciol, TszKin Julian Chan, Michele De Nadai, Osea Giuntella, Claudia Olivetti and Robert Willis for their helpful feedback, and two anonymous referees whose careful review led to many improvements. I owe special thanks to Hans Melberg, who shared his Stata code with me. I would like to thank Olympia Bover, Pilar García-Gómez, Athanasios Tagkalakis and Platon Tinios, who provided useful insights on the severance pay legislation in Spain and Greece. I would also like to thank participants at the Society of Labor Economists (2014), the European Association of Labour Economists (2014), the Population Association of America (2014), the European Economic Association (2014), the European Society for Population Economics (2014), the SHARE User Conference (2013), as well as seminar attendees at the University of Wuppertal, IZA and the IMT Lucca Institute for Advanced Studies for their comments. All errors are my own.

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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.University of Wuppertal and IZAWuppertalGermany
  2. 2.Schumpeter School of Business and EconomicsWuppertalGermany

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