Parental “love” on time: strength and timing in homeownership transfer

Abstract

With substantial parental support, China’s 1980–1996 birth cohorts, termed “the millennials” in this paper, have achieved an extremely high homeownership rate. This study is an attempt to explain the strength and timing of intergenerational transfer of housing-related wealth in China. The 2011–2013 China Household Finance Survey shows three dominant types of housing-related wealth transfer with increasing strengths overtime: no substantial help from parents, partial help from parents to cover down payment for housing mortgage, and full help from parents in the form of homeownership transfer. Chinese parents are found to be impurely altruistic, son-preference oriented, and risk-avoiding in their decisions of transferring wealth to married children. Consequently, wealth transfers tend to benefit the less accomplished sons who have better parent–child relationships, fewer siblings, lower-risk marriages, and stronger commitment to repaying aging parents. Emotional altruism, relational ethnics, and rational calculations are the underlying logics that govern intergenerational relations in the Chinese family.