THE DETERMINANTS OF LIVING ARRANGEMENTS FOR YOUNG ADULTS IN SINGAPORE

Abstract

Ageing population and low fertility rate have been two pressing issues in Singapore. Low fertility rate is caused partly by the delay in marriage of Singaporeans. A recent survey also reveals a link between high housing costs and delay in marriage (Sim, 2013). In this dissertation, the factors affecting the living arrangements of young adults in Singapore are analysed with a key focus on the role of housing consumption and investment demand on the moving-out decision. This dissertation contributes to the literature through an extensive statistical analysis of a survey carried out by the author in Singapore. In the previous literature on living arrangement, relatively fewer papers focused on the effects of housing factors on the moving-out decision. In addition, few studies analysed the living arrangements of young adults in Singapore. The results reveal that demand for living space and investment motivation in home purchase have positive and significant effects on the likelihood of young adults forming new households. The policy implications of these results are two folds. First, housing policies that relieve the housing constraints faced by young adults can have a positive impact on household formation and hence fertility. Second, anti-speculation measures should be combined with housing subsidies to ensure affordability to all and control excessive housing investments. In general, housing policies can be utilised to tackle the two pressing problems by encouraging young adults to start new families and have more children.