Intergenerational Wealth Transfer and Its Impact on Housing PDF Download
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Author: Xiao Di Zhu
Publisher:
ISBN:
Category : Estate planning
Languages : en
Pages : 56
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Author: Xiao Di Zhu
Publisher:
ISBN:
Category : Estate planning
Languages : en
Pages : 56
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Book Description
Author: Nhung Luu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Impacts of the global rise of housing price from 1980s on the economy has attracted a surging research interest. As housing represent a major share of household expenditure as well as total wealth, it's important to understand the role of housing on wealth inequality. Yet, due to data availability, little has been done to understand this issue. As wealth of households is accumulated from two main sources: capital savings and transfers, it's important to understand how these sources are linked to housing market when there's a shift in housing prices. Thus, the first two chapters of this thesis aim to a better understanding on the importance of housing channel on the economy. More specifically, the first chapter draws attention on the co-movement between housing prices and production output. By introducing different shocks to the economy, we can analyse their impacts on housing prices and capital accumulation as well as the mechanism in which these shocks are transmitted. On the other hand, the second chapter focuses on how intergenerational transfer makes inequality persistent via the housing market. By considering an economy with two different investment assets: housing and capital, we show that that there exists an equilibrium in which housing is more profitable than capital. As the rich family, i.e. the one who inherited relatively higher wealth, can access the housing market while the poor one can't due to the borrowing constraint, inequality maintains in the long run. Furthermore, bequest and intrahousehold transfer are the two essential transmission channels that link to wealth in different way. While intrahousehold transfer is believed to contribute to the development of individual's human capital and hence labour incomes, inheritance plays a decisive role in one's accumulation of capital and wealth. Data from the national transfer account in France showed us that over the last decades, there has been a notable change in a composition of private transfers: from a more dominant share of intrahousehold transfers to a more dominant inheritance one. As this shift triggers two adverse effects, it's therefore interesting to understand why and how it happens as well as how it is related to wealth inequality. These questions are addressed in the third chapter of my thesis.
Author: Osonde Osoba
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Personal wealth is often viewed as a product of good decision-making. Choose a good education, a good job, earn a good income, invest wisely, take risks, start a business, innovate. However, the reality of wealth is quite different. Wealth is often passed down from generations through inheritance and in-vivo transfers. One's household's wealth is as much an expression of their opportunities, as it is the opportunities of their parents and their grandparents. This means that wealth is a way for the present to hang on to the past and to propel the future. For differences between Black and white households, wealth is a reflection of past inequity. Longstanding inequities in the U.S. have worked against racial equity through myriad legal practices & exclusions: slavery, Jim Crow, the New Deal, FHA loans, the GI Bill's lack of Black inclusion,de jure segregation of red lining, reverse red lining, racial covenants, and the persistent injustices of a criminal justice system that led to the death of George Floyd sparking a wave of protest and conversation (Rothstein 2017, Darity Jr and Mullen 2020). While no American alive bore firsthand witness to all of this history, most Americans have borne witness to some, and the accumulation of harms reverberates across the life course of all. The sociological, psychological and ethical costs of disparities and discrimination in access to education, health, jobs, housing, justice, and financing cannot be fully measured. There is however one indicator that reflects some portion of these inequitable costs: the Black-white wealth gap in American society today (Shapiro, Meschede et al. 2013, Fox 2016, Pfeffer 2018, Boshara 2020, Aladangady and Forde 2021, Toney and Robertson 2021). The wealth gap reflects income differences accumulated over time, and hence serve as a useful economic "stock" of disparities. While median white household income is $68,000 and $40,000 for Blacks, the total wealth of an average white family is 10 times that of a Black family--$170,000 v $17,000 (Federal Reserve Board 2019). This paper is motived by addressing the history of unjust and, at times, racially motivated policy-making that is responsible for significant portions of the adverse racially disparate outcomes we can now measure. Given a long term policy challenge of identifying effective policies for addressing the wealth gap, this paper takes a first step in introducing a modeling environment that could be used for testing the long run impacts of policy interventions on differences between white and Black wealth.
Author: Edwin Deutsch
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This paper sheds light on intrafamilial gifts for housing. By using Austrian intergenerational survey data various questions are addressed. First, is familial aid more or less widespread in given social strata? Second, what are the determinants and motives for family gifts? And third, what are the possible impacts on the choice set of their recipients? Probit estimates show that gifts significantly depend on the parents lifetime financial position, consistent with life cycle permanent income (LCPI) approaches. Gifts to remove liquidity constraints are more difficult to reconcile with LCPI. quot;Dynasticquot; gifts that support household formation and ownership acquisition may be interpreted as intergenerational exchange. They occur more frequently than periodical cash transfers where altruistic behavior cannot be ruled out.
Author: Gary V. Engelhardt
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This paper examines the effects of intergenerational transfers on saving behavior by examining private wealth transfers targeted toward first-time home purchases. The study of transfer behavior in the housing market is advantageous for a number of reasons: the down payment requirement associated with home purchase can be thought of as an important, well-defined borrowing constraint that most U.S. households face; private wealth transfers targeted to home purchases are significant; and home equity is a highly important component of household wealth in the United States. The empirical analysis shows that transfer recipients have a saving rate that is lower than that of non-recipients by as much as 6 percentage points, representing a reduction of 39 to 49 percent in the household saving rate. In addition, households that receive transfers reduce the time required to save for the down payment by 22 percent. For each dollar of transfer received, households increase the dollar amount of the down payment by about 85 cents, allowing them to achieve a higher down payment threshold. Households also increase the value of the home purchased upon receiving a transfer, but by an amount that is much lower than would be possible if the transfer were fully leveraged. The amount of the transfer appears to be targeted to help households achieve certain down payment thresholds that give favorable terms on mortgages. Although the evidence suggests that the availability of a transfer reduces household savings, we cannot reject the alternative hypothesis that transfer recipients are inherently low savers.
Author: Gary V. Engelhardt
Publisher:
ISBN:
Category : House buying
Languages : en
Pages : 50
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Author: National Research Council
Publisher: National Academies Press
ISBN: 0309170877
Category : Social Science
Languages : en
Pages : 326
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Aging is a process that encompasses virtually all aspects of life. Because the speed of population aging is accelerating, and because the data needed to study the aging process are complex and expensive to obtain, it is imperative that countries coordinate their research efforts to reap the most benefits from this important information. Preparing for an Aging World looks at the behavioral and socioeconomic aspects of aging, and focuses on work, retirement, and pensions; wealth and savings behavior; health and disability; intergenerational transfers; and concepts of well-being. It makes recommendations for a collection of new, cross-national data on aging populationsâ€"data that will allow nations to develop policies and programs for addressing the major shifts in population age structure now occurring. These efforts, if made internationally, would advance our understanding of the aging process around the world.
Author: Robin Tillmann
Publisher: Springer
ISBN: 3319895575
Category : Social Science
Languages : en
Pages : 261
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Book Description
Using longitudinal data from the Swiss Household Panel to zoom in on continuity and change in the life course, this open access book describes how the lives of the Swiss population have changed in terms of health, family circumstances, work, political participation, and migration over the last sixteen years. What are the different trajectories in terms of mobility, health, wealth, and family constellations? What are the drivers behind all these changes over time and in the life course? And what are the implications for inequality in society and for social policy? The Swiss Household Panel is a unique ongoing longitudinal survey that has followed a large sample of Swiss households since 1999. The data provide the rare opportunity to go beyond a snapshot of contemporary Swiss society and give insight into the processes in people’s lives and in society that lie behind recent developments.
Author:
Publisher:
ISBN:
Category : Intergenerational relations
Languages : en
Pages :
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Abstract: Scholars have shown that intergenerational transfers positively affect the recipient's wealth. However, no one had considered how these types of transfers affect the wealth of the donor. The purpose of my dissertation was to determine if parents compromise their own economic well-being as a result of having children and engaging in financial transfers to them. I defined economic well-being as overall net worth, financial assets, and housing net worth. Financial transfers to children are defined as investments in children's education. By examining the effects of a relatively common and discretionary transfer to children, we gain a broad understanding of the effects of transfers on wealth, a previously overlooked topic in the sociology of wealth. I use the Health and Retirement Survey (1992), a nationally representative biennial longitudinal survey of person born between 1931 and 1941, to examine these relationships. Comparing wealth outcomes for households with and without children I was able to demonstrate that there are no long-term negative financial consequences associated with having children. Shifting the focus to differences among parents in their level of financial support of their children, I found that investing in children's education has positive effects on overall net worth and housing net worth. Finally, I examined these relationships separately for white, black, and Hispanic households in order to determine if there were racial or ethnic differences in the effects of having children and investing in their children's education on wealth. I found that while there were no substantive differences in the effects of having children on wealth by race or ethnicity, there differences in the effects of educational expenditures.
Author: N. Meltem Daysal
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Rising wealth inequality has spurred an increased interest in understanding how and why wealth is correlated across generations. Prior research has found an intergenerational correlation between 0.2 and 0.4 and has emphasized the role of family characteristics in driving this correlation. We contribute to this literature by examining the intergenerational transmission of wealth changes, which allows us to isolate the causal effect of wealth shocks from predetermined parental preferences and household characteristics. Using Danish Register Data, we examine the effect of home price changes that occur between ages 0-5, 6-11, and 12-17 on the value of the home children own at ages 29-33. For the youngest age group, we find that 12.7% of each Krone of home price change is transmitted to housing wealth in adulthood. The transmission rate for the 6-11 age group is higher, at 20.5%, and there is no transmission of home price changes that occur during the teenage years. Examining mechanisms, we find that home price increases in the first two age groups lead to modest increases in home ownership and educational attainment. There also is an increase in non-housing wealth, income, and partner wealth for the middle age group. Income and education can explain only 20-30% of the intergenerational transmission we document. We argue that our results largely reflect changes to parental/household behaviors and preferences that are passed down to children and cause them to accumulate more housing wealth in young adulthood.
