Home and mortgage ownership of the Dutch elderly

The relationship between home ownership of Dutch elderly households and age is strongly negative. Other studies suggest that this age gradient should be attributed to a cohort effect. In this paper, we investigate where those cohort effects come from. We also observe that mortgage ownership among elderly home-owners increased considerably during the nineties. Using panel data, we estimate models explaining home and mortgage ownership by age, cohort, and timeeffects, as well as other factors. Cohort and time effects are modelled explicitly using macro economic and housing market related variables. We find that the level of GDP per capita whenthe household head was young is the main factor explaining generation effects in home ownership among the elderly. After accounting for cohort effects it also appears that home ownership decreases slightly with age. Mortgage ownership among elderly home owners roseconsiderably during the nineties due to house price increases and due to financial innovation in the mortgage market. Cohort effects are also important. A supplementary analysis suggests that those cohort effects are due to the fact that the accidental bequest motive is becoming less important.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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