The Role of Parents on the Home Ownership Experience of Their Children: Evidence from the Health and Retirement Study
40 Pages Posted: 2 Oct 2017
Date Written: March 5, 2017
We construct a matched panel of the adult children of Health and Retirement Study respondents to study the role of lagged parental demographic and wealth attributes on subsequent home ownership decisions. A bivariate probit estimator is used to model the joint decision of adult children to live independently and either become or stay a homeowner between 2000 and 2012. A significant role for parent demographic and wealth attributes, often omitted from earlier research, is found. The explainable portion of the gap in becoming a home owner between white and non-white adult children increases from 26.6% to 65.1% when parental attributes are included.
Keywords: Home Ownership, Foreclosure, Household Formation, Inter-Generational Transfers
JEL Classification: D31, D64, I38, J15, R21, R28, R31
Suggested Citation: Suggested Citation