by Olga Cantó, Inmaculada Cebrián, Gloria Moreno
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 and economic outcomes for a large period including a bust, a deep recession and a recovery. Our results show that in addition to individual labor market status, the employment deprivation levels of other active household members are key determinants of youth economic outcomes and living arrangements decisions all along the business cycle.