Intergenerational Household Finance and the Green Transition Cost

Jean-Guillaume Sahuc (), Barbara Annicchiarico and Rebecca Clipal
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Jean-Guillaume Sahuc: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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Abstract: We study intergenerational differences in household balance sheets in the United States and the euro area and assess their implications for the green transition. Using harmonized microdata from the Survey of Consumer Finances and Household Finance and Consumption Survey , we document how asset composition, debt dynamics, and liquidity vary across age groups and regions. U.S. households, especially older cohorts, hold more financial and liquid assets, while euro-area households concentrate wealth in housing and deleverage earlier. These structural differences shape the capacity to finance climate investments, particularly deep housing retrofits that involve large upfront costs. We find that a majority of U.S. households aged 55+ could self-fund such renovations, compared to less than half of their euro-area counterparts. Liquidity constraints are more binding for younger cohorts in both regions. Our findings underscore the importance of accounting for intergenerational balance sheet heterogeneity in designing equitable environmental and economic policies.

Keywords: Household finance; surveys; overlapping generations; transatlantic comparison; green investments (search for similar items in EconPapers)
Date: 2025
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