The role of family reciprocity within the welfare state in intergenerational transfers for home ownership: Evidence from Chongqing, China

Abstract

Worldwide, housing is increasingly unaffordable for young people, many of whom rely on intergenerational transfers of assets to enter home ownership. This paper aims to qualitatively analyze the impacts of the welfare state and family reciprocity on young people's opportunity to access home ownership. Evidence from in-depth interviews with parents and young adults from Chongqing, Southwest China, shows that intergenerational transfers play an indispensable role in young people's opportunity to access home ownership. Such transfers are mainly motivated by the expectation of generalized reciprocity for old age care. The welfare state plays a role by lessening the pressure of unwanted reciprocity. Families with a local urban background, who tend to have more access to public welfare due to China's dualist welfare system, are less eager to invest in intergenerational transfers or expect less reciprocity if they are transferred. We argue that policies that encourage homeownership and that restrict social rental housing will put pressures on families and could potentially offset the policy intentions to improve the fertility rate and labor force participation.

Buying vs. Renting a Home in View of Young Adults in Poland

“…This is evident from the survey data, which shows that the number of respondents who rent a dwelling decreases with each age group, while the number of homeowners increases. It is mainly young people (from the lower age group) who choose to rent, i.e., from the first age group (18)(19)(20)(21)(22)(23)(24)(25). On the other hand, home ownership is important for more than 90 per cent of the respondents because it gives a feeling of security and stability and creates good living conditions.…”

“…However, this does not change the fact that young adults are being priced out of housing markets where they were once able to buy. Deng et al [25] argue that housing is unaffordable for many young adults. It is disheartening that not only is buying a home unaffordable for young adults [25,26] but renting has also become increasingly unaffordable for them, even though the decline in interest rates has made mortgages more affordable [27].…”

“…Deng et al [25] argue that housing is unaffordable for many young adults. It is disheartening that not only is buying a home unaffordable for young adults [25,26] but renting has also become increasingly unaffordable for them, even though the decline in interest rates has made mortgages more affordable [27]. Moreover, the pandemic further complicates the situation of many young people in this context.…”

Will Downward Intergenerational Housing Support Increase Parents’ Expectations for Old-Age Care from Adult Children? Evidence from China

“…Unlike general financial transfer, intergenerational housing support is special due to its social pressure and huge amount (Li, 2010; Li & Yi, 2007), which implies that the transfer may not be voluntary. Rather, there could be a tradeoff relationship between such a transfer and parents’ own old age financial security (e.g., their social security contribution or care purchase), and thus influence their care arrangements and expectations (Deng et al, 2020). Intergenerational transmission of homeownership is well documented in the homeownership literature (Helderman & Mulder, 2007; Henretta, 1984; Mulder & Smits, 1999) and through financial aid, 1 may influence the timing of children’s home purchase, the quality of home, and the mortgage duration (Deng et al, 2020; Helderman & Mulder, 2007).…”

Private Renting vs. Mortgage Home Buying: Case of British Housing Market—A Bayesian Network and Directed Acyclic Graphs Approach

“…This shows that an increasing number of people are becoming priced out of housing markets, in the sense that they cannot afford to buy a home. Deng et al [67] highlight that this phenomenon mainly affects young adults, for whom not only is buying a home no longer affordable, but now also renting is no longer achievable [68].…”