Parental background and home ownership of young adults in Taiwan: evidence from the administrative data

Homeownership is considered a measure of financial stability and security in many countries, such as in Taiwan. Constrained by the current social and economic environment of high housing prices and low wages, young adults have a higher threshold for entering the housing market than their parents, resulting in generational inequality in housing opportunities. Past studies have found that young adults whose parents have higher levels of education and income are more likely to own their own homes. In Taiwan, owning a house is the best tool for accumulating wealth. Therefore, if parents have a house and resources, they are more likely to support their children to buy a house. That is, if parents have a house, the proportion of their children who own a house should be higher than those whose parents do not have a house. This article focuses on children born between 1980-1990 (a total of 3,932,350 people). According to administrative data statistics, parents had a house in that year (2004), and now (in 2020, that is, the 30-40-year-old group) they or their spouses have/have no house compared with those whose parents had no home. This study also found that in Taiwan, like in other countries, the younger generation has difficulty buying a house. The increase in the rate of parental home ownership has squeezed the housing opportunities of young and middle-aged adults, which may also lead to a slowdown in class mobility. The results show that parents who own a house have a higher chance of their children owning their own house. At the same time, children of high-income parents have a higher proportion of home ownership than children of low-income parents, regardless of whether the parents own a house. It can be seen that the children of the previous generation with higher incomes, especially those whose parents own houses, are more likely to hold houses. Therefore, the government should think about how to weaken the function of housing as a wealth accumulation tool to weaken the relationship between high housing prices and class mobility.