Household Formation and Wellbeing of Young Individuals: A Comparative Analysis Based on the European Community Household Panel

Arnstein Aassve, University of Leicester
Letizia Mencarini, University of Florence

This paper provides a comparative analysis of the impact of family formation on young individuals' wellbeing. The analysis is based on the European Community Household Panel Survey from which we derive several alternative definitions of wellbeing. In particular we consider poverty status, household income (using alternative equivalence scales), and deprivation indices. We then apply Difference-in-Difference estimators combined with Propensity Score Matching techniques (DD-PSM) as a means to provide unbiased parameter estimates of the impact of childbearing on wellbeing. We find that childbearing events tend to reduce material wellbeing, but with significant differences between welfare regimes. There are for instance strong adverse effects in terms of poverty in countries belonging to the Liberal welfare state (UK and Ireland) but much smaller effects among Social Democratic welfare states. The results are more mixed once wellbeing is measured as a multidimensional deprivation index rather than poverty status or household income.