Homeownership and Portfolio Choice over the Generations

Gonzalo Paz-Pardo

American Economic Journal: Macroeconomics, 2024, vol. 16, issue 1, 207-37

Abstract: Earnings are riskier and more unequal for households born in the 1960s and 1980s than for those born in the 1940s. Despite improvements in financial conditions, younger generations are less likely to be living in their own homes than older generations at the same age. By using a life cycle model with housing and portfolio choice that includes flexible earnings risk and aggregate asset price risk, I show that changes in earnings dynamics account for a large part of the reduction in homeownership across generations. Lower-income households find it harder to buy housing and, as a result, accumulate less wealth.

JEL-codes: D15 G51 J31 R21 R31 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (4)

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Working Paper: Homeownership and portfolio choice over the generations (2021)
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DOI: 10.1257/mac.20200473

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