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Home ownership and social mobility

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  • Jo Blanden
  • Stephen Machin

Abstract

This paper extends the literature on social mobility to investigate intergenerational links in home ownership, an important marker of wealth. Repeated cross sectional data show that home ownership rates have fallen rapidly over time, and in particular amongst younger people in more recent birth cohorts. We then hone in on two British birth cohorts for whom we have information on parental home ownership. Comparing the intergenerational transmission of home ownership for individuals in the 1958 and 1970 British birth cohorts, we find that home ownership for 42 year olds from the 1970 birth cohorts (in 2012) shrunk disproportionately among those whose parents did not own their own home when they were children. Using housing measures in an intergenerational setting, and bearing in mind that housing is the most important component of wealth for most people, our results reinforce a picture of falling social mobility in Britain.

Suggested Citation

  • Jo Blanden & Stephen Machin, 2017. "Home ownership and social mobility," CEP Discussion Papers dp1466, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1466
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    References listed on IDEAS

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    1. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
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    3. Paul Gregg & Lindsey Macmillan & Claudia Vittori, 2017. "Moving Towards Estimating Sons' Lifetime Intergenerational Economic Mobility in the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(1), pages 79-100, February.
    4. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1553-1623.
    5. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2010. "Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality," The Centre for Market and Public Organisation 10/230, The Centre for Market and Public Organisation, University of Bristol, UK.
    6. Jo Blanden, 2013. "Cross-Country Rankings In Intergenerational Mobility: A Comparison Of Approaches From Economics And Sociology," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 38-73, February.
    7. Sandra E Black & Paul J Devereux & Petter Lundborg & Kaveh Majlesi, 2020. "Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviours," Review of Economic Studies, Oxford University Press, vol. 87(4), pages 1683-1725.
    8. Kerwin Kofi Charles & Erik Hurst, 2003. "The Correlation of Wealth across Generations," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1155-1182, December.
    9. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800, Elsevier.
    10. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2013. "Intergenerational persistence in income and social class: the effect of within-group inequality," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(2), pages 541-563, February.
    11. S.P. Jenkins & A.K. Maynard, 1983. "Intergenerational Continuities in Housing," Urban Studies, Urban Studies Journal Limited, vol. 20(4), pages 431-438, November.
    12. Blanden, Jo, 2013. "Cross-national rankings of intergenerational mobility: a comparison of approaches from economics and sociology," LSE Research Online Documents on Economics 59310, London School of Economics and Political Science, LSE Library.
    13. Renata Bottazzi & Thomas F. Crossley & Matthew Wakefield, 2015. "First-time House Buying and Catch-up: A Cohort Study," Economica, London School of Economics and Political Science, vol. 82, pages 1021-1047, December.
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    Cited by:

    1. Carozzi, Felipe & Hilber, Christian A.L. & Yu, Xiaolun, 2024. "On the economic impacts of mortgage credit expansion policies: Evidence from help to buy," Journal of Urban Economics, Elsevier, vol. 139(C).
    2. Bertrand Garbinti & Frédérique Savignac, 2020. "Accounting for Intergenerational Wealth Mobility in France over the 20th Century: Method and Estimations," Working papers 776, Banque de France.
    3. Nachmany, Harel & Hananel, Ravit, 2019. "A tale of two neighborhoods: Toward a new typology of land rights," Land Use Policy, Elsevier, vol. 80(C), pages 233-245.
    4. Jo Blanden & Andrew Eyles & Stephen Machin, 2021. "Trends in Intergenerational Home Ownership and Wealth Transmission," CEPEO Working Paper Series 21-05, UCL Centre for Education Policy and Equalising Opportunities, revised May 2021.
    5. Joanne Lindley & Steven McIntosh, 2019. "The Social Mobility of Home Ownership: To What Extent Have the Millennials Fared Worse?," Working Papers 2019012, The University of Sheffield, Department of Economics.
    6. Ricky Kanabar & Paul Gregg, 2021. "Intergenerational wealth transmission in Great Britain," CEPEO Working Paper Series 21-06, UCL Centre for Education Policy and Equalising Opportunities, revised Apr 2021.
    7. Matteo Benetton & Marianna Kudlyak & John Mondragon, 2022. "Dynastic Home Equity," Working Paper Series 2022-13, Federal Reserve Bank of San Francisco.
    8. Bárbara Castillo, 2020. "Trends in intergenerational homeownership mobility in France between 1960-2015," Working Papers halshs-02511116, HAL.
    9. Brian Bell & Jack Blundell & Stephen Machin, 2023. "Where is the Land of Hope and Glory? The geography of intergenerational mobility in England and Wales," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 73-106, January.
    10. Disney, Richard & Gathergood, John & Machin, Stephen & Sandi, Matteo, 2020. "Does homeownership reduce crime? A radical housing reform in Britain," LSE Research Online Documents on Economics 108426, London School of Economics and Political Science, LSE Library.
    11. Bertrand Garbinti & Frédérique Savignac, 2020. "Intergenerational Home Ownership in France over the Twentieth Century," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 411-435, National Bureau of Economic Research, Inc.
    12. Nachmany, Harel & Hananel, Ravit, 2023. "The Urban Renewal Matrix," Land Use Policy, Elsevier, vol. 131(C).
    13. Richard Disney & John Gathergood & Stephen Machin & Matteo Sandi, 2023. "Does Homeownership Reduce Crime? A Radical Housing Reform from the UK," The Economic Journal, Royal Economic Society, vol. 133(655), pages 2640-2675.
    14. Bell, Brian & Blundell, Jack & Machin, Stephen, 2018. "The changing geography of intergenerational mobility," LSE Research Online Documents on Economics 91714, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    housing; intergenerational mobility; cohorts;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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