Back to parents: earnings of young adults and informal care

Abstract

ABSTRACT Return migrants are often considered to be disadvantaged in terms of earnings. However, family needs might affect an individual’s migration decision and allocation of his (her) time between formal employment and informal care. The generalized Roy model employed to account for self-selection in migration decisions shows that the losses in earnings of return migrants are overestimated for female young adults when family characteristics, such as the presence of children or parents in need of care, are not accounted for. The study is based on age- and gender-specific samples of individuals born in 1974 and followed between the ages of 25 and 32 years drawn from Swedish longitudinal data. The results suggest that female internal return migrants rely on grandparenting to reconcile their family and working life. In particular, mothers of children under eight years old earn more when they reside close to their parents. The negative self-selection of male return migrants remains after controlling for family characteristics. This likely relates to differences in the labour supply as returns on education do not differ by residential location choice. The estimates do not demonstrate any link between potential informal elder care and a change in the earnings of young adults.