Dear all,
we kindly invite you to today’s ECON Theory and Policy Seminar Talk
on Monday, June 3, 2024 from 4:00-5:30 pm (TU Wien, Freihaus Building, Sem.Room DA04, green area)
"The housing channel of intergenerational wealth persistence"
https://sites.google.com/site/gjnatvik/ (BI Norwegian Business School)
We use Norwegian tax data and a life-cycle model with housing to study how wealth transmits across generations through the housing market. After controlling for a rich set of attributes, households with richer parents
are nearly 15% more likely to be homeowners at age 30. Moreover, when entering, they have higher leverage and buy homes worth 15% more. Estimates using international stock market returns as a shiftshare instrument support a causal interpretation. We further
document that housing outcomes when young are important determinants of midlife wealth. This holds also when using plausibly exogenous variation in homeownership caused by the timing of intra-family deaths. As a result, housing gaps caused purely by parental
wealth explain 12% of intergenerational wealth persistence, making housing equally important as the combined impact of a wide range of household characteristics including income and education. We explore new mechanisms for parental support, such as intra-family
housing transactions below market value. Through the lens of our model, house price expectations stand out as a key driver of the magnitude of the housing channel of intergenerational wealth persistence.
Further Events:
https://www.tuwien.at/en/mg/econ/events
Best,
Julia Hutter for
Alexia Fuernkranz-Prskawetz
Julia Hutter
TU Wien
Institute of Statistics and Mathematical Methods in Economics
Research Group Economics
Phone: +43 1 58801 10531
Mail:
julia.hutter@tuwien.ac.at