IDEAS home Printed from https://ideas.repec.org/a/cog/socinc/v11y2023i1p163-175.html
   My bibliography  Save this article

Is Property an Insurance or an Additional Burden? Financial Stress Among Homeowners in Europe

Author

Listed:
  • Martin Heidenreich

    (Institute for Social Sciences, Carl von Ossietzky University of Oldenburg, Germany)

  • Sven Broschinski

    (Institute for Social Sciences, Carl von Ossietzky University of Oldenburg, Germany)

Abstract

A crucial function of wealth is to protect individuals from the consequences of adverse life events. However, sometimes wealth also implies additional financial risks. In addition to the insurance function of homeownership (the most common form of wealth), we therefore also examine financial squeezes that reflect the indebtedness and social embeddedness of homeowners and limit their options for dealing with social risks. A third hypothesis expects a trade‐off between social protection and homeownership. Taking the example of unemployment, we examine the effects of short‐term unemployment on the perceived financial situation of households based on data derived from EU‐SILC for 27 European countries. It can be shown that debt‐free homeownership reduces financial stress in the case of unemployment compared to tenants and indebted owners. A debt‐free home thus offers an additional buffer and insurance against the financial consequences of unemployment. However, indebted homeowners are particularly hard hit by unemployment because they have to use all their financial resources to pay off their mortgages. Finally, we did not find a trade‐off but a cumulation of advantages due to homeownership and generous unemployment benefits in countries with high net replacement rates.

Suggested Citation

  • Martin Heidenreich & Sven Broschinski, 2023. "Is Property an Insurance or an Additional Burden? Financial Stress Among Homeowners in Europe," Social Inclusion, Cogitatio Press, vol. 11(1), pages 163-175.
    • Handle: RePEc:cog:socinc:v11:y:2023:i:1:p:163-175
    DOI: 10.17645/si.v11i1.5875
    as

    Download full text from publisher

    File URL: https://www.cogitatiopress.com/socialinclusion/article/view/5875
    Download Restriction: no
    File URL: https://libkey.io/10.17645/si.v11i1.5875?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cog:socinc:v11:y:2023:i:1:p:163-175. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: António Vieira or IT Department (email available below). General contact details of provider: https://www.cogitatiopress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.