Homeownership and portfolio choice over the generations

Arbeitspapier

Earnings are riskier and more unequal for households born in the 1960s and 1980s than for those born in the 1940s. Despite the improvements in financial conditions, younger generations are less likely to be living in their own homes than older generations at the same age. By using a life-cycle model with housing and portfolio choice that includes flexible earnings risk and aggregate asset price risk, I show that changes in earnings dynamics account for a large part of the reduction in homeownership across generations. Lower-income households find it harder to buy housing, and as a result accumulate less wealth.

Object Details

• ISBN: 978-92-899-4522-6
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2522

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Macroeconomics: Consumption; Saving; Wealth ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Portfolio Choice; Investment Decisions ; Wage Level and Structure; Wage Differentials
• Subject: Housing demand ; earnings risk ; wealth accumulation ; intergenerational inequality

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Paz Pardo, Gonzalo
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2021

Further information

• DOI: doi:10.2866/280547
• Handle: http://hdl.handle.net/10419/234076
• Last update: 10.03.2025, 11:41 AM CET