Household precariousness and youth living arrangements in Spain: evidence for a complete business cycle

Economic difficulties during recessions affect young individuals’ life projects and may delay emancipation and childbearing. For a period of persistent growth, previous analyses on emancipation in Spain found a key role of the “adapting to circumstances” attitude in youth cohabiting living arrangements: a large number of young individuals reduce their poverty risk by remaining at their parental homes if both parents are employed, and at the same time, a significant number of households reduce their poverty risk by adding cohabiting young workers’ wages to their disposable income. Using individual and household employment deprivation information from an extensive dataset, we study the evolution and determinants of youth living arrangements for a complete business cycle. Our results show that in addition to individual labor market status, the employment deprivation levels of other active household members are important determinants of youth emancipation decisions along the cycle.