The Pattern of Home Ownership Across Age Cohorts and its Impact on the German Net Wealth Distribution

Tobias Schmidt and Arthur Alik-Lagrange

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: We analyze the link between homeownership and the net wealth distribution using household-level micro data from Germany and the US. We are particularly interested in the effect of the pattern of ownership across cohorts. Given that wealth accumulates over the life-cycle and that owners are wealthier than renters, past tenure choices, affecting today’s share of owners for different cohorts, should be related to current wealth levels and inequality. In order to gauge the effect of the ownership structure over cohorts on the distribution of net wealth we impose the homeownership pattern of the US on Germany. This leads to a large increase in the German median net wealth and reduces wealth inequality. Past tenure choice seems to affects today’s net wealth distribution. Some of the effects can be attributed to the difference in ownership shares between old cohorts in Germany and the US, but this effect appears to be less pronounced than expected.

JEL-codes: D10 D30 D31 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-eur and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145604

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