Living arrangements in Europe: whether and why paternal retirement matters

This paper uses retrospective micro data from eleven European coun-
tries 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.