Why do home-owners do better?
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Australians who own their own home display favourable outcomes on a range of socio-economic indicators when compared to renters, and substantial benefits of home-ownership also appear to accrue to their children. Whether such effects are causal or simply reflect pre-existing characteristics associated with selection into home-ownership has important implications for decisions to be made by individuals and families, and for policy in light of recent declines in home-ownership rates for younger adults. The literature primarily attributes the better outcomes of those in home-ownership to greater residential stability, particularly in the case of children’s educational attainment, and a greater incentive to invest in the local community, but there is little empirical evidence on the sources of benefits from home-ownership in Australia. Using longitudinal data from the Household, Income and Labour Dynamics in Australia survey (HILDA) this paper employs a range of strategies to test competing hypotheses relating to causal mechanisms and selection effects associated with home-ownership. We focus on indicators of physical and mental health, life satisfaction and, for youth, educational attainment. The results suggest the better physical and mental health outcomes of home-owners reflect selection effects rather than any causal impact of home-ownership on health. However, there is evidence that home-ownership promotes higher life-satisfaction, and of residential stability and parental community engagement associated with parental home-ownership impacting beneficially on outcomes for youth.
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Barrett, G.; Cigdem, M.; Whelan, S.; Wood, Gavin (2015)Home ownership represents an important social and economic cornerstone of Australian society. In addition to providing security of tenure, ownership has represented an important savings vehicle by which Australians can ...
Barrett, G.; Cigdem, M.; Whelan, S.; Wood, Gavin (2015)As house prices in Australia have increased, concern has been expressed about the ability of young Australians to attain home ownership. In August 2014, for example, the proportion of all mortgage financed dwelling ...
Ong, Rachel; Wood, Gavin; Colic-Peisker, V. (2015)In Australia and other ‘homeownership societies’ it has been conventional to think of housing pathways in terms of a smooth linear progression, leading to outright ownership in middle age and a retirement buffered by low ...