Public Child Support to Young Adults Living with their Parents. An International Dynamic Comparison

While a large amount of facts have been gathered concerning the similarities and dissimilarities of family policies as they are commonly understood (i.e. support for babies an young children) accross developed countries, the evidence is not so impressive as far young adults are concerned. This category is indeed difficult to define, especially for family policy purposes, because young adults may belong either to families headed by their parents or to their own household. Anyway, some family benefits accrue to these people, directly or via their parents as long as they stay at the parental home. Even if, from an adminstrative point of view, the problem is esentially a question of definition of entitlements and whatever the channel through which the money does benefit to these young adults, what is the profile of family transfers as these individuals age, as long as they belong to the parental household ? Do these benefits experience a sharp decrease at some age threshold ? Which threshold(s) ? Or do they steadily decrease, for every people or at least for some categories ? Are these profiles similar for various countries ? The main aim of this paper is to give some insights about these questions, mainly through careful descriptions of the patterns in changing level of family benefits and standard of living as the grown-up ages. But, in addition, I will try, through plots, to test the two following hypotheses : first, may we consider the young adult earnings as an effective source of compensation of child support reduction ? Second, does the family adjust its labor supply as family transfers decrease, as if its members try to compensate, by additional earnings, the impact, on their standard of living, of the child support reduction ? The data set use dis the PACO one. I use for four european countries, all the household panel waves available in PACO files at the beginning of 1996 : 7 years for Germany (1984-90), 8 years for Luxembourg (1985-92), 6 years for France (Lorraine, 1985-90) and 3 waves for the UK (1991-93). I transformed these raw data in year-to-year transitions, pooled first separately for each country and ,then , after conversion in ECU of all financial amounts, pooled for the four countries. The resulting global file includes more than 22,700 observations.