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Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth
Ayllón Gatnau, Sara
Universitat Pompeu Fabra. Departament d'Economia i Empresa
Youth is one of the phases in the life-cycle when some of the most decisivelife transitions take place. Entering the labour market or leaving parentalhome are events with important consequences for the economic well-beingof young adults. In this paper, the interrelationship between employment,residential emancipation and poverty dynamics is studied for eight Europeancountries by means of an econometric model with feedback effects. Resultsshow that youth poverty genuine state dependence is positive and highly significant.Evidence proves there is a strong causal effect between poverty andleaving home in Scandinavian countries, however, time in economic hardshipdoes not last long. In Southern Europe, instead, youth tend to leave theirparental home much later in order to avoid falling into a poverty state that ismore persistent. Past poverty has negative consequences on the likelihood ofemployment.
Economic and Business History
Labour, Public, Development and Health Economics
youth poverty dynamics
trivariate multinomial probit
state dependence
feedback effects
unobserved heterogeneity
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