Abstract
Using data from the National Longitudinal Survey of Youth 1979 (NLSY79), this paper investigates the effect of the age of leaving parental home of American youths on their future wages and intergenerational mobility. Based on a sample of 5863 siblings from 2448 families, I employ family fixed effects and fixed effects instrumental variables estimation methods to examine the effect on future wages. To further address the endogeneity issue, I also control for measures of ability. The results present the first microempirical evidence on the negative effect of delayed emancipation from parents on future incomes. The negative effect is greater for children in white families and is also bigger for men than for their female siblings. The analyses also show that the age of leaving parental home is an important factor in explaining the intergenerational persistence of income.