Challenges in early adulthood and the timing of nest-leaving

Recent young adult cohorts have delayed moving out from the parental home, reflecting social trends and macroeconomic conditions that undermine the affordability of independent living. This dissertation focuses on the timing of these nest-leaving transitions in relation to other significant decisions and events in early adulthood. Each of the three chapters investigates whether potentially adverse outcomes lead to earlier nest-leaving, which has been shown to be financially harrowing and disadvantaging. To address these research questions, I utilize longitudinal data from the Household Income and Labour Dynamics in Australia (HILDA) survey. Methodologically, I extensively apply event history models and focus on effects on the timing of nest-leaving events. I address potential endogeneity between the nest-leaving decision and other choices in early adulthood by estimating these simultaneously, accounting for selection effects through random effects models. The first essay considers how heavy drinking and cigarette smoking affect the timing of leaving home. As risky health behaviors, I find evidence that young adults who drink heavily leave home sooner than moderate or non-drinking counterparts. Among women, early initiation of alcohol or tobacco use by age 15 further compounds nest-leaving risks, showing that substance usage is far more consequential for their co-residence with parents. The second essay investigates human capital investment in tertiary education, to determine if graduation or dropout rates disfavor students who move out and maintain their own independent household. This chapter also considers whether parents condition their offer of co-residence on the young adult's enrollment. The results indicate that men clearly benefit while co-residing, as they graduate sooner than counterparts who live independently. However, women do not significantly benefit from co-residence in this way, and instead tend to move out around the time of graduation. The third essay examines the pathways out from the parental home -- either with or without a partner -- and how these may be affected by negative life events. Sudden illness or injury of the young adult or a family member, the death of a close friend or a relative, and victimization to violent or property crimes are unforeseeable events that can compromise the young adult's ability to navigate key transitions in adulthood. Results suggest that men are more likely to remain at home longer after a family member is in ill health, whereas women are more likely to leave home soon after the death of a close friend or experiences of property crime. The findings across these essays consistently emphasize women's short-lived co-residence with parents, surfacing from disaggregated analyses by gender. Several factors which contribute to earlier nest-leaving are themselves disadvantaging in nature, and thus raise a concern that negative experiences early in adulthood could beget further hardships later on. This dissertation contributes to the nest-leaving literature by highlighting potential precursors of disadvantage, even while the young adult co-resides and receives in-kind parental transfers.