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To Own or Not to Own? Household Portfolios, Demographics and Institutions in a Cross-National Perspective

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  • Sierminska, Eva

    (LISER (CEPS/INSTEAD))

  • Doorley, Karina

    (Economic and Social Research Institute, Dublin)

Abstract

Using harmonized wealth data and a novel decomposition approach, we show that cohort effects exist in the income profiles of asset and debt portfolios for a sample of European countries, the U.S. and Canada. We find that younger households' participation decisions in assets are more responsive to income than older households. Family structure plays a significant role in explaining cross-country differences for both cohorts. Examining institutional differences, we find that in more financially developed and economically open countries, households are less likely to own housing but more likely to be in debt. Typical mortgage characteristics and mathematical literacy are also correlated with debt participation across countries. These findings have important implications for policy setting during times of financial unease for the young, as well as for the future in helping secure adequate income for the elderly. Our results show that there is scope for policies which promote asset participation for young households and debt participation, where there is a need for consumpation smoothing, for older households.

Suggested Citation

  • Sierminska, Eva & Doorley, Karina, 2013. "To Own or Not to Own? Household Portfolios, Demographics and Institutions in a Cross-National Perspective," IZA Discussion Papers 7734, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7734
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    Cited by:

    1. ROSSI Cristina & SIERMINSKA Eva, 2015. "Single again? Saving patterns when widowhood occurs," LISER Working Paper Series 2015-04, Luxembourg Institute of Socio-Economic Research (LISER).
    2. Pedro Salas-Rojo & Juan Gabriel Rodríguez, 2021. "The distribution of wealth in Spain and the USA: the role of socioeconomic factors," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(3), pages 389-421, September.
    3. Sara Lamboglia & Massimiliano Stacchini, 2023. "On the drivers of financial literacy: the role of intergenerational mobility," Questioni di Economia e Finanza (Occasional Papers) 766, Bank of Italy, Economic Research and International Relations Area.
    4. Karina Doorley & Eva Sierminska, 2014. "Cross-National Differences in Wealth Portfolios at the Intensive Margin: Is there a Role for Policy?," Research on Economic Inequality, in: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting, volume 22, pages 43-85, Emerald Group Publishing Limited.
    5. Marianna Brunetti & Costanza Torricelli, 2012. "Second Homes: Households' Life Dream or (Wrong) Investment?," CEIS Research Paper 351, Tor Vergata University, CEIS, revised 04 Aug 2012.
    6. Frank Cowell & Eleni Karagiannaki & Abigail McKnight, 2012. "Accounting for Cross-Country Differences in Wealth Inequality," LWS Working papers 13, LIS Cross-National Data Center in Luxembourg.
    7. Marianna Brunetti & Costanza Torricelli, 2012. "Second Homes: Households' Life Dream or (Wrong) Investment?," CEIS Research Paper 351, Tor Vergata University, CEIS, revised 04 Aug 2012.
    8. Johnson Antwi & Cephas B. Naanwaab, 2022. "Generational Differences, Risk Tolerance, and Ownership of Financial Securities: Evidence from the United States," IJFS, MDPI, vol. 10(2), pages 1-17, May.
    9. Michał Brzeziński & Katarzyna Sałach, 2020. "Why wealth inequality differs between post-socialist countries?," Working Papers 2020-14, Faculty of Economic Sciences, University of Warsaw.
    10. Andrej Cupák & Pirmin Fessler & Maria Silgoner & Elisabeth Ulbrich, 2021. "Exploring Differences in Financial Literacy Across Countries: The Role of Individual Characteristics and Institutions," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 409-438, December.
    11. Maike Damme, 2020. "Overcrowded Housing and Relationship Break-up," European Journal of Population, Springer;European Association for Population Studies, vol. 36(1), pages 119-139, March.
    12. Brzezinski, Michal & Sałach, Katarzyna, 2021. "Factors that account for the wealth inequality differences between post-socialist countries," Economic Modelling, Elsevier, vol. 105(C).
    13. Marianna Brunetti & Costanza Torricelli, 2017. "Second homes in Italy: every household’s dream or (un)profitable investments?," Housing Studies, Taylor & Francis Journals, vol. 32(2), pages 168-185, February.
    14. Pedro Salas-Rojo & Juan Gabriel Rodríguez, 2019. "The distribution of wealth in the U.S. and Spain: the role of socio-economic factors," Working Papers 506, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    institutions; decomposition; wealth portfolios; demographics;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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