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Retirement, housing mobility, downsizing and neighbourhood quality - A causal investigation

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  • Nguyen, Ha Trong
  • Mitrou, Francis
  • Zubrick, Stephen R.

Abstract

This paper provides the first causal evidence on the impact of retirement on housing choices. Our empirical strategy exploits the discontinuity in the eligibility ages for state pension as an instrument for the endogenous retirement decision and controls for time-invariant individual characteristics. The results show that retirement leads to a statistically significant and sizable increase in the probability of making a residential move or the likelihood of becoming outright homeowners. We also find that individuals downsize both physically and financially and tend to move to better neighbourhoods or closer to the coast upon retirement. We additionally discover that some housing adjustments take place up to 6 years before retirement. Moreover, our results reveal significant heterogeneity in the retirement impact by gender, marital status, education, housing tenue, income and wealth. Within traditional heterosexual couple households, housing mobility choices are primarily influenced by the wife's retirement while housing downsizing decisions are only affected by the husband's retirement.

Suggested Citation

  • Nguyen, Ha Trong & Mitrou, Francis & Zubrick, Stephen R., 2024. "Retirement, housing mobility, downsizing and neighbourhood quality - A causal investigation," Journal of Housing Economics, Elsevier, vol. 63(C).
  • Handle: RePEc:eee:jhouse:v:63:y:2024:i:c:s1051137723000645
    DOI: 10.1016/j.jhe.2023.101977
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    Cited by:

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    2. Trinh Le & Euan Richardson, 2023. "Expenditure patterns of New Zealand retiree households," Working Papers 23_07, Motu Economic and Public Policy Research.

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    More about this item

    Keywords

    Retirement; Housing; Migration; Residential mobility; Quality of neighbourhood; Downsizing; Instrumental variable;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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