Young Adults Living with Their Parents and the Influence of Peers

47 Pages Posted: 12 Feb 2016

See all articles by Effrosyni Adamopoulou

Effrosyni Adamopoulou

University of Mannheim and IZA

Ezgi Kaya

Cardiff University - Cardiff Business School; Global Labor Organization (GLO)

Multiple version iconThere are 2 versions of this paper

Date Written: November 26, 2015

Abstract

This paper focuses on young adults in the US living with their parents and studies the role of peers. Using data from the National Longitudinal Study of Adolescent Health we analyse the influence of high school friends on the nest-leaving decision of young adults. We achieve identification by exploiting the differences in the timing of leaving the parental home among peers, the individual-specific nature of the peer groups, and by including school and grade fixed effects. Our results indicate that there are statistically significant peer effects on the decision of young adults to leave parental home. This is true even after we control for labour and housing market conditions and for a comprehensive list of individual and family-of-origin characteristics that are not usually observed by the econometrician. We discuss various mechanisms and we confirm the robustness of our results through a placebo exercise. Our findings correspond with the increasing trend of young adults living with their parents that has been observed in the US during the last 50 years.

Keywords: peer effects, friends, living arrangements, leaving parental home

JEL Classification: D10, J12, J60, Z13

Suggested Citation

Adamopoulou, Effrosyni and Kaya, Ezgi, Young Adults Living with Their Parents and the Influence of Peers (November 26, 2015). Bank of Italy Temi di Discussione (Working Paper) No. 1038, Available at SSRN: https://ssrn.com/abstract=2731699 or http://dx.doi.org/10.2139/ssrn.2731699

Effrosyni Adamopoulou (Contact Author)

University of Mannheim and IZA ( email )

L7, 3-5
Mannheim
Germany

Ezgi Kaya

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Global Labor Organization (GLO) ( email )

Collogne
Germany

HOME PAGE: http://https://glabor.org/user/kayaez/

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