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American Dream Delayed: Shifting Determinants of Homeownership

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  • Khorunzhina, Natalia

    (Department of Economics, Copenhagen Business School)

  • Miller, Robert A.

    (Tepper School of Business)

Abstract

This paper develops and estimates a dynamic model of discrete choice for labor supply, fertility and transition from tenant to home-owner,to investigate the secular decline in home ownership over the past several decades,wholly attributable to households postponing the purchase of their first home. House prices only partly explain the decline; higher base level wages led to lower fertility also contributing to the decline,because households with children are more likely to own a home than those without.Somewhat surprisingly we find higher levels of female education ameliorated this trend,highly educated women placing greater value on homeownership.

Suggested Citation

  • Khorunzhina, Natalia & Miller, Robert A., 2019. "American Dream Delayed: Shifting Determinants of Homeownership," Working Papers 7-2019, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2019_007
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    1. Sumru Altuğ & Robert A. Miller, 1998. "The Effect of Work Experience on Female Wages and Labour Supply," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(1), pages 45-85.
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    4. Hotz, V Joseph & Miller, Robert A, 1988. "An Empirical Analysis of Life Cycle Fertility and Female Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 91-118, January.
    5. Zvi Eckstein & Michael Keane & Osnat Lifshitz, 2019. "Career and Family Decisions: Cohorts Born 1935–1975," Econometrica, Econometric Society, vol. 87(1), pages 217-253, January.
    6. V. Joseph Hotz & Robert A. Miller, 1993. "Conditional Choice Probabilities and the Estimation of Dynamic Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 497-529.
    7. Marco Francesconi, 2002. "A Joint Dynamic Model of Fertility and Work of Married Women," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 336-380, Part.
    8. George‐Levi Gayle & Limor Golan & Robert A. Miller, 2015. "Promotion, Turnover, and Compensation in the Executive Labor Market," Econometrica, Econometric Society, vol. 83, pages 2293-2369, November.
    9. Zvi Eckstein & Kenneth I. Wolpin, 1989. "Dynamic Labour Force Participation of Married Women and Endogenous Work Experience," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(3), pages 375-390.
    10. Jonas D. M. Fisher & Martin Gervais, 2011. "Why Has Home Ownership Fallen Among The Young?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(3), pages 883-912, August.
    11. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    12. Margiotta, Mary M & Miller, Robert A, 2000. "Managerial Compensation and the Cost of Moral Hazard," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(3), pages 669-719, August.
    13. Munch, Jakob Roland & Rosholm, Michael & Svarer, Michael, 2008. "Home ownership, job duration, and wages," Journal of Urban Economics, Elsevier, vol. 63(1), pages 130-145, January.
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    15. Peter Arcidiacono & Robert A. Miller, 2019. "Nonstationary dynamic models with finite dependence," Quantitative Economics, Econometric Society, vol. 10(3), pages 853-890, July.
    16. Green, Richard K. & White, Michelle J., 1997. "Measuring the Benefits of Homeowning: Effects on Children," Journal of Urban Economics, Elsevier, vol. 41(3), pages 441-461, May.
    17. Peter Arcidiacono & Robert A. Miller, 2011. "Conditional Choice Probability Estimation of Dynamic Discrete Choice Models With Unobserved Heterogeneity," Econometrica, Econometric Society, vol. 79(6), pages 1823-1867, November.
    18. Donald R. Haurin & Toby L. Parcel & R. Jean Haurin, 2002. "Does Homeownership Affect Child Outcomes?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 30(4), pages 635-666.
    19. George-Levi Gayle & Robert Miller, "undated". "Life-Cyle Fertility Behavior and Human Capital Accumulation," GSIA Working Papers 2004-E16, Carnegie Mellon University, Tepper School of Business.
    20. Smith, Lawrence B & Rosen, Kenneth T & Fallis, George, 1988. "Recent Developments in Economic Models of Housing Markets," Journal of Economic Literature, American Economic Association, vol. 26(1), pages 29-64, March.
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    Cited by:

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    2. Kalouptsidi, Myrto & Scott, Paul T. & Souza-Rodrigues, Eduardo, 2021. "Linear IV regression estimators for structural dynamic discrete choice models," Journal of Econometrics, Elsevier, vol. 222(1), pages 778-804.
    3. Kim, Jeong Ho (John) & Lee, Heebum & Lee, Sung Kwan, 2022. "Do credit supply shocks affect fertility choices?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).

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    More about this item

    Keywords

    Housing Demand; Fertility; Labor Supply;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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