Is Property an Insurance or an Additional Burden? Financial Stress Among Homeowners in Europe

Abstract

A crucial function of wealth is to protect individuals from the consequences of adverse life events. However, sometimes wealth also implies additional financial risks. In addition to the insurance function of homeownership (the most common form of wealth), we therefore also examine financial squeezes that reflect the indebtedness and social embeddedness of homeowners and limit their options for dealing with social risks. A third hypothesis expects a trade‐off between social protection and homeownership. Taking the example of unemployment, we examine the effects of short‐term unemployment on the perceived financial situation of households based on data derived from EU‐SILC for 27 European countries. It can be shown that debt‐free homeownership reduces financial stress in the case of unemployment compared to tenants and indebted owners. A debt‐free home thus offers an additional buffer and insurance against the financial consequences of unemployment. However, indebted homeowners are particularly hard hit by unemployment because they have to use all their financial resources to pay off their mortgages. Finally, we did not find a trade‐off but a cumulation of advantages due to homeownership and generous unemployment benefits in countries with high net replacement rates.

Does spouse's parental housing support affect one's happiness: Evidence from China

“…So, it suggests that when husbands receive housing support from their parents, it has a spillover effect on their wives’ well‐being. It is likely that when husbands have secure houses, it reduces their financial stress, and they can better provide for their families, thereby enhancing their wives’ happiness (Heidenreich and Broschinski 2022). However, husbands may not perceive their wives’ parental housing support as essential for their happiness.…”

Wealth Stratification and the Insurance Function of Wealth

“…Our issue includes six contributions. Two of them are large international comparative studies: One compares 27 European countries (Heidenreich & Broschinski, 2023) and the other one looks at 17 European countries and the US (Rapp & Humer, 2023). The remaining four are single-country studies carried out with data from Germany, Italy, and the UK.…”

“…Five of the six studies carry out quantitative data analyses, and one study (Carmichael, 2023) decided on a qualitative research design. Three out of six studies measure wealth in terms of housing wealth (homeownership/tenure status and housing value; see Althaber et al, 2023;Bedük, 2023;Heidenreich & Broschinski, 2023), one study measures it in terms of financial wealth (Rapp & Humer, 2023) and another creates an index to directly measure the insurance capacity of wealth (Gritti et al, 2023). One study investigates high-net-worth individuals (Carmichael, 2023).…”

“…The next contribution tests differences in the insurance function across country contexts. Heidenreich and Broschinski (2023) compare the insurance function of wealth against unemployment across 27 European countries. The authors use the EU-SILC data to examine homeownership as a form of wealth that can be used as insurance against life risks.…”

Wealth gaps in post-secondary enrolment in Europe? A comparison across European countries and wealth components

“…Third, wealth buffers against the negative consequences of adverse life events (Bedük 2023;Hällsten and Pfeffer 2017;Heidenreich and Broschinski 2023;Mari, Keizer, and Van Gaalen 2023) . The possibility of relying on savings can lower families' level of psychological stress or other related factors, such as behavioral problems or marriage conflict, because they know that they have a financial cushion in times of economic hardship (family stress mechanism).…”