This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: Among 30-year-olds with parents in the wealthiest fifth of the population, nearly seven out of ten own their own home. Among those with parents in the least wealthy fifth, the figure is around four out of ten.
And the difference has grown. "Financial support from parents is an important ticket into the housing market. And because housing is the most important route to wealth for most people, an early advantage in life can lead to large differences in wealth later on," says Ragnar Juelsrud.
He is an associate professor at the Department of Economics at the University of Oslo. Together with four colleagues, he has used registry data from Statistics Norway and the Norwegian Mapping Authority to follow parents and children across the entire Norwegian population from 1992 to 2017. In the article "The housing channel of intergenerational wealth persistence," Juelsrud and his co-authors Ella Getz Wold (BI), Knut Are Aastveit (Norges Bank and BI), Eirik Eylands Brandsaas (Federal Reserve Board), and Gisle James Natvik (BI) show that the gap in homeownership between young people with wealthy parents and young people with less wealthy parents has increased markedly.
In the study, the researchers divide parents into two groups based on financial wealth—that is, bank deposits, shares and mutual funds, not income. "In 2005, the difference in homeownership at age 30 was around 10 percentage points between the two groups. By 2017, the gap had increased to around 18 percentage points," he says, stressing that this amounts to almost a doubling in just over 10 years.
The study data extend to 2017. Public statistics do not suggest that it has become easier for young people without assistance since then: According to Statistics Norway's 2023 living conditions survey, approximately one in four households that had bought a home during the previous four years had received help from their parents—a proportion that has remained fairly stable since 2012. Among homebuyers under the age of 30, almost half received parental support, Statistics Norway's 2015 survey showed.
A common objection is that children of wealthy parents are also more likely to have higher education and good incomes themselves, and that this is what explains the difference. "We have accounted for the young people's own income, education, wealth, place of residence, and whether they live with a partner, as well as for the parents' income, education, and place of residence. These factors explain around half of the gap, especially the young people's own income.
Extract — continue reading at the source.
