Brick-by-brick inequality. Homeownership in Italy, employment instability and wealth transmission

Abstract

This paper investigates changes between, and inequalities within, birth-cohorts in Italy, surrounding homeownership. Italy is a homeownership and familialistic society, where in recent decades an increasing 'generational divide' in employment prospects has opened up, as a side-effect of a partial and targeted labour market deregulation. Drawing on the interplay of macro-level constraints with micro-level factors, we discuss patterns of inequality in attaining homeownership between cohorts, arising from greater instability of employment for young adults, and within cohorts, stemming from class-based patterns of intergenerational wealth transmission. Our analytical strategy combines a sequential cohort design with two levels of analysis that simultaneously consider young people around the normative age of housing independence and wealth transmission from their families triggered by their leaving the nest. Longitudinal analyses apply random-effects probit models and linear probability distributed fixed-effects to panel data from the Bank of Italy (SHIW 1989-2016). Results show a decrease in homeownership attainment across cohorts, which can be partially ascribed to employment disadvantages faced by younger cohorts. On top of this, class-specific patterns of intergenerational transmission are in place: lower classes rely on timely housing wealth transfers, whereas upper classes are prepared to provide their children with an extended stream of financial transfers.

Keywords: Cohort study; Employment instability; Homeownership; Intergenerational transmission; Italy; Wealth.