The Celtic Tiger and home leaving among Irish young adults

Abstract

This paper examines the effect of local economic growth on whether young adults move out of the parental home to form new households—an important milestone in the transition to adulthood. I use the placement of foreign direct investment during the Celtic Tiger, the large economic expansion in Ireland during the 1990s, to estimate the impact of local job growth on the likelihood that young adults leave home. This paper contributes to the literature by exploiting an exogenous shock to the local labor market to identify the main effect of employment growth on home leaving behavior. The results show that local economic growth increases the probability that young adults leave home particularly for the well-educated young adults most likely to be employed in the factories that opened during the period.