Mental and general health at the edges of owner occupation

Purpose The purpose of this paper is to consider one test of a well-functioning housing system – its impact on wellbeing. Exploring one indicator of this, this study aims to track changes in mental and general health across a mix of tenure transitions and financial transactions in three jurisdictions: Australia, the UK and the USA. Design/methodology/approach Using matched variables from three national panel surveys (Household, Income and Labour Dynamics in Australia, British Household Panel Survey/Understanding Society and Panel Study of Income Dynamics) over 17 years (2000–2017) to capture the sweep of the most recent housing cycle, this study adopts a difference-in-difference random-effects model specification to estimate the mental and general health effects of tenure change and borrowing behaviours. Findings There is an enduring health premium associated with unmortgaged owner-occupation. Mortgage debt detracts from this, as does the prospect of dropping out of ownership and into renting. A previously observed post-exit recovery in mental health – a debt-relief effect – is not present in the longer run. In fact, in some circumstances, both mental and general health deficits are amplified, even among those who eventually regain homeownership. Though there are cross-country differences, the similarities across these financialised housing systems are more striking. Practical implications The well-being premium traditionally associated with owner occupation is under threat at the edges of the sector in all three jurisdictions. In this, there is cross-national convergence. There may therefore be scope to introduce policies to better support households at the edges of ownership that work across the board for debt-funded ownership-centred housing systems. Originality/value This paper extends the duration of a previous analysis of the impact of tenure transitions and financial transactions on well-being at the edges of ownership in the UK and Australia. The authors now track households over nearly two decades from the start of the millennium into a lengthy (post-global financial crisis) era of declining housing affordability. This study adds to the reach of the earlier study by adding a general health variable and a third jurisdiction, the USA

Australia’s COVID-19 pandemic housing policy responses

This research reviewed Australia’s COVID-19 housing policy responses to better understand their intervention approach, underlying logic, short and long term goals, target groups and level of success. It considered literature and policy from Australia and a small number of international comparator policies; conducted online surveys of landlords and of economists; and consulted key stake holders. Given Australia’s federated system of government, considerable differences quickly emerged between intervention approaches across states and territories. This was also driven by the extent to which different jurisdictions were impacted by the spread of the virus, the extent and frequency of lockdowns, and damage to state/local economies. The national and state policy measures implemented to support home ownership achieved the desired goal of providing short-term stimulus to the residential building sector and support to the broader economy. However, a range of anticipated and unforeseen consequences have precipitated as a result of concentrated demand-side subsidies, low interest rates and flexible lending conditions. The establishment of an agile infrastructure to support information sharing will support more effective and innovative housing policy development in the future. The state-to-state infrastructure and approaches that were developed rapidly and which supported jurisdictional responses to COVID-19 provide a template for a shelf-ready policy-sharing practice that warrants supported development across governments. This could usefully include local government as well as state and territory and national tiers of governance

The Growing Intergenerational Housing Wealth Divide: Drivers And Interactions In Australia

This paper unpacks the drivers of growing intergenerational housing wealth inequality in Australia. We also account for the multidimensional nature of housing wealth divides by examining the interaction between age and other divides. We find that the Australian intergenerational housing wealth gap widened from 161% in 1997–98 to 234% in 2017–18, favouring the older cohort. This was driven by lower rates of homeownership and lower property value growth among younger cohorts, with the relative lack of homeownership access the more significant driver. However, higher rates of couple formation and tertiary education amongst the young mitigated a further widening of the gap. The intergenerational housing wealth gap is exacerbated within specific population subgroups. The growing housing wealth gap between the income-poor young and income-rich old has been particularly alarming, climbing from 532% to 1230% over two decades. We discuss implications for policies seeking to alleviate intergenerational tensions in housing markets

Exploring the many housing elasticities of supply: The case of Australia

The housing elasticity of supply (HES)—how housing supply responds to price rises—has been a major preoccupation of policymakers in the face of worsening housing affordability in many countries. Yet we lack an understanding of just how this quantity varies across regions, and within cities, or the factors which drive it. We address this question by estimating the HES for 341 spatially disaggregated Australian local government areas (LGAs) from 2001 to 2019 for houses and units (attached homes). Our estimates document considerable variation in HES estimates across LGAs. For houses it ranges from 0.17 at the 25th percentile to 0.44 at the 75th percentile while for units it varies between 0.56 and 1.17. Interestingly, we find no correlation between the LGA HES estimates for houses and units. We explore how variation in the local HES relates to potential housing supply drivers such as accessibility to central business districts, topography, temperature range, annual precipitation, and political orientation. The most important driver of the HES is accessibility—LGAs on the city-fringe have the highest HES for houses, while for units it is highest in the inner-city. We find political orientation and annual precipitation have some impact on the HES for units

Gender equity insights 2017: inside Australia's gender pay gap

A new analysis of Workplace Gender Equality Agency (WGEA) data shows that sizeable gender pay gaps persist across the workforce, but that improving gender balance in leadership teams measurably improves pay equity in organisations. Gender Equity Insights 2017: Inside Australia's Gender Pay Gap, the second in the BCEC|WGEA Gender Equity Insights series, also reveals that male graduates are more likely to access high paying roles than female graduates. Key findings: Increasing the representation of women in executive leadership roles is associated with lowering gender pay gaps. Organisations with the lowest share of female executive leaders have an average gender pay gap double the size of those with an equal share of women in senior roles: 20% compared with 10%. Organisations that increased the share of women in executive leadership roles by more than 10% recorded a reduction in the organisational gender pay gap of 3 percentage points over the course of a single year. Overall, the median gender pay gaps for full-time graduate trainees are 2.9% on base salary and 2.1% on total remuneration. However, the gender pay gap for graduate trainees progressively widens among the top echelons of salary earners. The highest-paid 10% of women in graduate trainee positions receive at least $81,000 in base salary, whereas the highest-paid 10$88,000. The average gender pay gap declines as female representation among management increases. The managerial gender pay gap falls steadily from around 15% in total remuneration among firms where one-fifth of managers (20%) are female, to 8% for organisations where four-fifths of managers (80%) are female. However, gender pay gaps are seen to rise sharply in workplaces with the highest concentrations of female managers. For organisations with a greater than 80% share of female managers, the management gender pay gap rises from around 8% to more than 17% in favour of men

Personality traits, risk aversion and endowment effects on residential mobility outcomes

The psychology literature offers substantial evidence suggesting that personality traits are associated with different residential mobility patterns. Our study extends this previous work by examining whether the effects of personality traits on mobility are attenuated by risk aversion and endowment effects. We also investigate whether personality traits exert an indirect influence on mobility through risk aversion and endowment effects. We draw on data from the Household, Income and Labour Dynamics in Australia Survey over the period 2014–2018. We find that openness and extraversion have positive associations with residential mobility, but risk aversion and endowment effects reduce the likelihood of moving. Moreover, risk aversion and endowment effects act as mediators through which openness and extraversion exert an indirect influence on residential mobility. These mediators account for 35 % and 30 % of the total effect on mobility exerted by openness and extraversion respectively. The types of individual differences that matter for residential mobility also vary by sex and age, reflecting the influence of life course contexts on residential mobility outcomes

Housing wealth, mortgages and Australians’ labour force participation in later life

In the life cycle model of consumption and saving, homeownership is an important vehicle for horizontal redistribution. Households accumulate wealth in owner-occupied housing during working lives before benefiting from imputed rent streams in retirement. But in some countries housing wealth’s welfare role has broadened as owners increasingly use flexible mortgages to smooth consumption during working lives. One consequence is higher outstanding mortgages later in life, a burden exacerbated by high real house prices that compel home buyers to demand mortgages that are a growing multiple of their incomes. We investigate whether these developments are prompting longer working lives, an idea that is especially relevant in countries offering relatively low government pensions. Australia is one such country. We use the 2001–2017 panels of the Household, Income and Labour Dynamics in Australia Survey to estimate hazard models of exits from the Australian labour force as workers approach pensionable age. We find that those with high outstanding mortgage debts are more likely to postpone retirement, as are those with relatively low amounts of private pension wealth. These results are stronger in urban housing markets, and especially among males

Housing wealth and aged care: asset-based welfare in practice in three OECD countries

The transition of the baby boomer bulge into old age and their increasing longevity will lift the numbers of elderly in residential aged care. Population ageing and associated fiscal pressures have motivated governments to shift responsibility for the financing of aged care to the individual. We consider policies that include owner-occupiers’ housing wealth and imputed rental incomes in means tests that determine co-contribution charges for residential aged care. Differences in how housing wealth is included in the residential aged care resource tests of three OECD countries–Australia, England and the Netherlands–are documented. We find some neglected equity implications as tenants in all three countries typically pay higher co-payments for their residential aged care than homeowners with similar wealth holdings. These outcomes are a consequence of the concessional treatment of owners’ housing equity stakes, and of wider significance given the growing importance of asset-based welfare strategies. England has relatively progressive asset and income tests that offer more limited concessions