Housing Market and Family Relations in a Welfare State

Abstract

One idea widespread in current discourse on the ageing population speaks of the 'intergenerational inequity' between the elderly and the young. This assumption overlooks the extensive lifetime financial transfers from older to younger generations that occur within families. Housing wealth may reinforce inequalities over generations, but this wealth also provides an opportunity to assist offspring in entering the housing market. The increase in house prices in recent years has put parents in an even better position to provide financial support. Instead of following the distributional principles that guides redistribution within the welfare state, this distribution may reproduce or even increase social inequalities. Intergenerational inequalities in economic prosperity may therefore also lead to intragenerational inequalities between those who have parents that can help and those who do not. However, this type of inequality may strengthen rather than weaken family solidarity.