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Pensions, Income Taxes, And Homeownership: A Cross‐Country Analysis

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  • Hans Fehr
  • Maurice Hofmann
  • George Kudrna

Abstract

The article studies the role of pensions and income taxes in determining homeownership. We develop a stochastic, overlapping generations model with tenure choice and heterogenous skill types calibrated to Germany. Then, we simulate alternative income tax and pension policy structures from the United States and Australia, since these developed nations have similar incomes per capita, but highly different homeownership rates. Our results highlight that the pension system and its financing have decisive long‐term effects on homeownership. The latter is even more significant than income tax, where labor and capital income taxation affect homeownership in opposite directions.

Suggested Citation

  • Hans Fehr & Maurice Hofmann & George Kudrna, 2025. "Pensions, Income Taxes, And Homeownership: A Cross‐Country Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(1), pages 143-174, February.
  • Handle: RePEc:wly:iecrev:v:66:y:2025:i:1:p:143-174
    DOI: 10.1111/iere.12723
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