Owning vs. Renting: The benefits of staying put?

This article analyses how differences in outcomes between owner and renter households vary across countries based on institutional features such as rental lease lengths. A substantial literature is devoted to identifying benefits associated with owning relative to renting (including in terms of civic participation, income, children educational outcomes, health) and the mechanisms driving these differences. The higher level of residential stability associated with homeownership has been identified as a potential driver. This paper uses microdata from the European Union Statistics on Income and Living Conditions (EU-SILC) for 24 countries to explore whether differences in outcomes between owners are renters vary across countries and whether they are systematically smaller when the differences in length of residence across tenure is smaller. Given the wide differences in tenure mix and length of residence across European countries, the EU-SILC data provides the opportunity to identify to what extent outcomes such as income, workforce participation, life satisfaction and social engagement are more similar across tenure types when length of residence is more similar. The results indicate that the direction of the relationship between tenure and the selected outcomes tend to be similar across countries although stronger in some than other with owners generally obtaining more desirable outcomes. When looking at the relationship between differences in length of tenure for owners and renters and outcomes, findings suggest that owners have outcomes more similar to renters in countries in which the difference is smaller. These results point to the potential benefits of policies that would increase residential stability for renters.