Housing Mobility and Downsizing at Older Ages in Britain and the USA

Banks, James; Blundell, Richard; Oldfield, Zoé; Smith, James P.

doi:10.1111/j.1468-0335.2011.00878.x

Cited by 74 publications

(57 citation statements)

References 12 publications

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“…In addition, and in line with the results by Banks et al . () they observe that the lack of housing equity drawdown is a crucial element in explaining differences in wealth decumulation between the two countries. They suggest that this phenomenon is likely to be explained by a combination of factors such as the consumption value of housing, the financial and emotional transaction costs involved in releasing housing wealth and the risk‐return mix provided by housing.…”

Section: Home Equity In Retirementmentioning

confidence: 98%

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

Andreu

Alessie

Angelini

2018

Journal of Economic Surveys

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The so‐called retirement‐savings puzzle is a phenomenon by which, contrary to what the standard life‐cycle model predicts, households do not run down their wealth significantly during retirement. In this review paper, we survey the literature on the retirement‐savings puzzle and we connect it with the literature on housing equity during retirement. To establish a link between these two streams of literature, we use as a framework the work of Nakajima and Telyukova (2013a, Home equity in retirement, UCSD Working Paper) and Nakajima and Telyukova (2017, Reverse mortgage loans: a quantitative analysis, Journal of Finance 72: 911–950), who find that home‐ownership interacts with factors that explain the retirement‐savings puzzle, notably with the bequest motive. We complement the results by Nakajima and Telyukova by relating them to the literature on altruistic bequests, strategic bequests and housing as a commitment device, all of which give further insights on the connection between home‐ownership and bequests. We complement our review of the literature with descriptive evidence using the Netherlands as a case study.

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Section: Home Equity In Retirementmentioning

confidence: 98%

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

Andreu

Alessie

Angelini

2018

Journal of Economic Surveys

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“…We have provided evidence in other work that there exists far less geographical mobility in Britain compared to the United States and more downsizing in the US compared to the UK as a meaningful fraction of older Americans move to smaller homes (i.e. fewer rooms) with little evidence of such downsizing in Britain (Banks et al 2010;2012). While this lower rate of British mobility was characteristic of both owners and renters, the differential was particularly high among renters indicating that higher transactions costs associated with owning are unlikely to be a full explanation.…”

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confidence: 96%

Life-Cycle Consumption Patterns at Older Ages in the US and the UK: Can Medical Expenditures Explain the Difference?

et al. 2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes.You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. licence. www.econstor.eu Life-cycle consumption patterns at older ages in the US and the UK: can medical expenditures explain the difference? If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated IFS Working Paper W15/12James Banks Richard Blundell Peter Levell James P. SmithThe Institute for Fiscal Studies (IFS) is an independent research institute whose remit is to carry out rigorous economic research into public policy and to disseminate the findings of this research. IFS receives generous support from the Economic and Social Research Council, in particular via the ESRC Centre for the Microeconomic Analysis of Public Policy (CPP). The content of our working papers is the work of their authors and does not necessarily represent the views of IFS research staff or affiliates. What can explain a difference of this magnitude? An obvious starting point is to examine age paths of income to access the extent to which consumption expenditures are tracking age paths in household income. But the second panel in Figure 1, which plots cohort averaged paths of household income at older ages in the two countries, demonstrates that income declines at very similar rates at older ages in the two countries so that this seems unlikely to be the major reason. In this paper we investigate other possible reasons that may explain the dramatically different patterns of nondurable consumption of older ages in the two countries by investigating differences in both inter and intra-temporal consumption for households around and beyond retirement age. The set of factors that we explore in this paper include: differential cohort effects in the two countries that may distort average life-cycle age profiles, differences in the timing of retirement in the presence of separabilities with employment, differential paths of housing expenditures possibly driven by institutional differences in housing markets between countries, level and path differences in health status and mortality, and finally levels and volatility of medical spending in the US as deteriorat...

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“…However, Figure 2 offers very little evidence for such 'retirement mobility' in the UK, especially for men. This might be related to the more limited geographical variation in climate and amenities in Britain as compared to the US, and the greater institutional rigidities in the public rental sector in Britain (Banks et al, 2012). In light of the age profile of Figure 2, we would expect intergenerational proximity to be driven mainly by the residential moves of the younger generation (Warnes, 1986).…”

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confidence: 98%

Residential proximity of parents and their adult offspring in the United Kingdom, 2009–10

Chan

Ermisch

2015

Population Studies

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Using data from a large household survey that is representative of the UK population, we study how close parents and adult children live to each other. We show that residential mobility over the life course tends to increase the physical distance between the generations. There are large differences in intergenerational proximity between the foreign born and UK born, and among ethnic groups. The determinants of intergenerational proximity from the parent's viewpoint are not identical to those from the child's viewpoint. Contrary to some earlier studies, intergenerational proximity, from the child's viewpoint, does not vary with the number of siblings. But from the parent's viewpoint, having more children is unambiguously associated with a higher probability of living close to at least one child. We end with a brief discussion of some possible implications of several long-term demographic trends in the UK for intergenerational proximity.key words: geographical proximity, family geography, intergenerational relations 2

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Housing Mobility and Downsizing at Older Ages in Britain and the USA

Cited by 74 publications

References 12 publications

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

Life-Cycle Consumption Patterns at Older Ages in the US and the UK: Can Medical Expenditures Explain the Difference?

Residential proximity of parents and their adult offspring in the United Kingdom, 2009–10

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