The Long-Term Consequences of a Golden Nest: Socioeconomic Status in Childhood and the Age at Leaving Home

Abstract

Abstract The age at leaving the parental home has significant implications for social and economic outcomes across the life course, highlighting the importance of examining nest-leaving patterns. We study the role of childhood standard of living on the age at nest leaving. Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE), we show empirically that individuals who grow up in families with a higher socioeconomic status—that is, in a golden nest—leave the parental home later than others. Given that better-off individuals tend to obtain more education, and that young adults generally leave the parental home after completing their education, we also find that a higher level of education delays nest leaving. Nonetheless, the positive relationship between socioeconomic status and nest-leaving age still holds for given education levels, across European countries characterized by different cultural traits, for both males and females, and among urban and rural residents. We use a three-period life cycle model to show that this behavior is consistent with standard assumptions about preferences and resources if earnings increase with age. Moreover, habit-forming preferences that assume that utility depends on the gap between current and past consumption reinforce the delaying effect of a golden nest on nest leaving.