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WHY HAS HOME OWNERSHIP FALLEN AMONG THE YOUNG? *
Author(s) -
Fisher Jonas D. M.,
Gervais Martin
Publication year - 2011
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2011.00653.x
Subject(s) - fell , boom , demographic economics , earnings , baby boom , economics , business , macro , labour economics , demography , geography , finance , sociology , population , cartography , environmental engineering , computer science , engineering , programming language
We document that home ownership of households with “heads” aged 25–44 years fell substantially between 1980 and 2000 and recovered only partially during the 2001–5 housing boom. The 1980–2000 decline in young home ownership occurred as improvements in mortgage opportunities seemingly made it easier to purchase a home. This article uses an equilibrium life‐cycle model calibrated to micro and macro evidence to understand these developments. A trend toward marrying later mechanically lowers young home ownership after 1980. We show that the large rise in earnings risk that occurred after 1980 can easily account for the remaining decline in young home ownership.