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The housing channel of intergenerational wealth persistence

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Listed:
  • Ella Getz Wold
  • Knut Are Aastveit
  • Eirik Eylands Brandsaas
  • Ragnar Enger Juelsrud
  • Gisle James Natvik

Abstract

We use Norwegian micro data and a life-cycle model with housing to study how wealth transmits across generations through the housing market. A mediation analysis reveals large housing gaps based on parental wealth. A shift-share IV-analysis using stock market returns supports a causal interpretation. Using the timing of intra-family deaths, we further show that housing outcomes when young are important determinants of later-in-life wealth. Nearly 15% of intergenerational wealth persistence occurs through the housing market, making housing equally important as the combined impact of parental wealth via a broad range of offspring characteristics, including income and education.

Suggested Citation

  • Ella Getz Wold & Knut Are Aastveit & Eirik Eylands Brandsaas & Ragnar Enger Juelsrud & Gisle James Natvik, 2024. "The housing channel of intergenerational wealth persistence," Working Papers 06/2024, Centre for Household Finance and Macroeconomic Research (HOFIMAR), BI Norwegian Business School.
    • Handle: RePEc:bbq:wpaper:0013
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    More about this item

    Keywords

    Housing market; intergenerational wealth; wealth inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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