The Keys to the House - How Wealth Transfers Stratify Homeownership Opportunities

Author: Klaus Pforr

Cooperation partners: Nora Müller, Jascha Dräger

Project description

This study investigates how actual and anticipated intergenerational wealth transfers (i.e. intergenerational gifts and inheritances) contribute to social stratification in the transition to homeownership. Using a discrete event data analysis based on data from the German Socio-Economic Panel (N=13,018), we find that individuals whose parents were blue-collar or white-collar workers are less likely to become homeowners. Receiving inheritances or gifts significantly increases the likelihood of home ownership, with the effect being strongest in the year of the transfer and declining rapidly thereafter. Expected future transfers also increase the likelihood of home ownership before the transfer is received. Expected and received transfers together explain up to 56% of the differences in transition rates to homeownership by parental socioeconomic status, but the importance of transfers for the transition to homeownership varies widely across classes. Not taking expected transfers into account leads to a significant underestimation of the importance of transfers for the effect of parental socioeconomic status on homeownership.

Publications:

Dräger, Jascha, Nora Müller und Klaus Pforr (2024): The Keys to the House: How Wealth Transfers Stratify Homeownership Opportunities. SOEPpapers 1210. https://www.diw.de/documents/publikationen/73/diw_01.c.915378.de/diw_sp1210.pdf.