Parental wealth and resource transfers: How they matter in France for home ownership and living standards

Abstract

The role played by parental wealth in facilitating the life chances and living standards of offspring is a topic of growing interest in stratification research. For working and middle class households much of their intervivos transfers to children is provided in the form of assistance with a home purchase. This paper examines the impact of parental wealth and transfers of wealth on several aspects of the homeownership decision — the timing of the purchase, the cost of the home, and the downpayment proportion, as well as living standards subsequent to the purchase. We utilize a unique data set from France which contains information on parental wealth and wealth transfers from both sets of parents of a couple. We correct for possible endogeneity of parental transfers and model the joint determination of the downpayment proportion and home value. The results make clear the complex pathways by which parental wealth influences the tenancy arrangements and living standards of offspring