Home leaving in Italy: why so late?

In Chapter 1, I provide an overview of the relevant literature on the home exit choice by discussing both reduced-form and structural models. The most promising ap- proaches allow the residential arrangements to be simultaneously chosen with other aspects such as supply of labor, investment in human capital, etc. Also, the ex- plicit consideration of the intra-family strategic interactions appears to be desirable in models studying the departure from the parental home. In Chapter 2, I use data from the Bank of Italy to provide a descriptive picture on the home exit patterns in Italy. I first discuss extensively the data and the is- sues related to their use in the analysis of the home exit choice. Then, I provide evidence on the home exit in Italy along two dimensions: (i) a cross-country com- parison showing that Italy has exceptionally large parents-children coresidence rates; and (ii) a cohort-comparison showing that coresidence is increasing among younger generations. Finally, based on the descriptive analysis, I estimate a simple reduced- form model of the probability of leaving the parental home. In Chapter 3, I develop a dynamic discrete choice model in which agents simultaneously choose labor supply, residential arrangements and marital status, conditional on the economic and institutional framework. The model is structurally estimated with the Method of Simulated Moments for Italy. It is then exploited to provide a quantitative assessment on the role of factors that are considered relevant by the existing literature. Results suggest that, in Italy, parental transfers act as insurance against unemployment and that higher parental income would delay the exit from home. Labor market conditions are also found to be important. Lower wages are in fact associated to higher coresidence rates and a 10 percent increase in real wages is expected to fill the employment gap between North and South. Finally, housing costs also have a role. A 10 percent subsidy on rents would lower the percentage of individuals residing with their parents by 5 p.p., in every age class.