A nest or a golden cage? Family co-residence and human capital investment decisions of young adults

Household arrangements and human capital investment decisions of young Ital ians with a high school diploma are analysed A model of the choices of resi ding with parents or forming a new family, jointly with those of investing in either work experience, or further education, or stopping investment is estimated The results show that family background has a major impact on the decision to study, housing costs induce co-residence, and unemployment inc reases the probability of studying. Education policies subsidising universi ty studies on a merit ground would thus reduce income inequality housing al lowances would favour marriage, and labour policies would have the side-eff ect of decreasing university dropouts.