The Impact of Tightened Unemployment Benefit Eligibility on Young Adults’ Housing and Use of Private Safety Nets

Koen Declercq, Muriel Dejemeppe and Mathilde Pourtois
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Koen Declercq: CAPE, UCLouvain - Saint-Louis Bruxelles, Belgium
Muriel Dejemeppe: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)
Mathilde Pourtois: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 2026005, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: When access to unemployment benefits (UB) is restricted early in the career, young labour market entrants may rely more on private safety nets, such as the parental home, to insure against unemployment risk. Using a difference-in-differences strategy, this paper investigates the causal impact of a 2015 reform tightening UB eligibility on master’s graduates’ decision to leave the parental home in Belgium. We find that the reform delays home-leaving for young men, especially those who would have chosen shared housing. In contrast, young women respond by increasing labour supply, substituting market income for reduced public insurance to maintain residential independence. These results highlight that restricting UB can trigger broader behavioural responses through both family and labour market channels.

Keywords: unemployment insurance; gender; home-leaving; insurance substitution; difference-in-differences (search for similar items in EconPapers)
JEL-codes: C21 J08 J12 J18 J21 J65 J68 (search for similar items in EconPapers)
Date: 2026-02-25
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2026005

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