Interrelationships among home ownership and early family events in Australia

Abstract

The generations of Australians who entered adulthood in the second half of the twentieth century experienced a standard housing tenure trajectory that was more clearly defined than it is today. Young adults would typically leave the family home to marry and await the birth of their first child while residing in a rental home before entering into home ownership. The housing tenure trajectories of later generations who entered adulthood closer to the turn of the twenty-first century have become destandardised, but there is little empirical analysis of these trajectories or their consequences. As time progressed towards the turn of the twenty-first century, the standard life course trajectory was challenged by the concept of ‘choice’, which led to the loosening of traditions and a more diverse range of lifestyles. Many of these changes were associated with changing life course patterns, for example, individuals were spending more time in further education, delaying entry into the labour force, entering unions that may or may not result in marriage and choosing to postpone the birth of a first child. Early literature assumed that there was an appropriate order and timing for transitions of key life-events and that negative outcomes would be experienced later in life if an appropriate sequence of housing tenure and family events was not adhered to. Specifically, the age pension at retirement in Australia assumes low housing costs which have long term implications for families that do not attain home ownership, increasing their vulnerability to poverty in the later stages of life. This thesis draws on longitudinal data from the first ten waves (2001-2010) of the Household Income and Labour Dynamics in Australia (HILDA) survey to investigate the current housing tenure pathways of young families. The research examines whether the order and timing of transitions of key life-events with respect to home ownership attainment have indeed shifted. The three primary research questions addressed in this thesis are: 1. What are the housing pathways and associated family life events for families of child bearing age in contemporary Australia? 2. What is the timing of birth relative to the transition into home ownership for married women? 3. Is the timing and order of the two major life events, birth of a child and transition into home ownership, associated with housing affordability problems? The thesis contains three analytical chapters and each chapter addresses one research question. The first analytical chapter focuses on the order of housing and family life events. The pathway for an individual is characterised by sequences of time spent in each housing tenure status and statuses of other selected life-event variables including birth of first or consecutive child, union formation and dissolution and changes in employment status. Clusters of individuals with similar multi-channel sequences characterise different housing experiences and provide a typology of typical housing pathways associated with other life experiences. The analysis identifies different types of housing tenure transitions primarily related to entering home ownership either before or after the birth of a child. The birth of a child and the movement into home ownership are often seen as markers of progression along a life course. The second analytical chapter examines the timing of home ownership attainment and the birth of a child. These two processes are analysed simultaneously to determine the factors associated with home ownership before or after the birth of a child, and the duration from the beginning of a relationship to the occurrence of a birth or a transition to home ownership. The framework for this statistical analysis is a multi-process event-history model, which allows the timing of home ownership and parenthood to be examined together, assuming that the timing of the transitions into home ownership and birth processes are partially explained by underlying common unobserved factors. The results show that the likelihood of birth increases with prior home ownership attainment but as time passes following home ownership attainment, the likelihood of birth decreases. However, home ownership attainment is not found to be associated with prior birth. The third analytical chapter investigates whether or not the order and the timing of these two processes has implications for a family’s housing affordability situation. The fixed effects panel regression approach is used to investigate whether birth of a child and/or home ownership attainment impacts on the ability to pay for housing. A transition into home ownership within the previous year is found to be associated with lower housing affordability and stress levels are up to ten times greater with home ownership attainment compared to when a child is born within the last year. This research shows that housing tenure pathways have increased in diversity with certain events acting as triggers for housing tenure change in particular in relation to home ownership attainment. Furthermore, order and timing of a first birth and home ownership attainment matter for housing affordability.