Labour Market Position, Intergenerational Transfers and Home-ownership: A Longitudinal Analysis for West German Birth Cohorts

Abstract

This article examines with longitudinal data for three birth cohorts in West Germany how the transition to home-ownership is influenced by occupation al class, employment of the spouse, father’s class and parental home-owne rship. In addition, it tries to understand why working class households had a relatively high home-ownership rate in older birth cohorts. Important results are that sk illed manual workers do rema rkably better than un- and semi-skilled workers with resp ect to the likelihood of home-ownership. Living in rural areas and coming from a working class family increases the rate of home-ownership. The latter was particularly true for older birth cohorts. Intergenerational transfers increase the rate of transition for all households, though in particular for low-income households. Furthermore, two earners in a household speed up the transit ion to home-ownership. It is also shown that parental transfers have become increasingly impo rtant for younger birth cohorts, presumably because of a marked deterioration in macro-economic conditions.