No. 275 - Intergenerational Transfers, Borrowing Constraints and the Timing of Home Ownership

by Luigi Guiso and Tullio Jappelli
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The 1991 Italian Survey of Household Income and Wealth contains detailed retrospective information on major bequests and gifts received by each member of the household. This information is used to estimate the share of intergenerational transfers in total wealth and to relate this share to households' characteristics. Gifts and bequests represent between 25 and 3 6 percent of total net worth. Besides contributing to household assets, intergenerational transfers may help overcome liquidity constraints. We analyze the effect of transfers on the saving period required to purchase a house and on the value of the house purchased when households have limited access to mortgage markets. We estimate that inter vivos transfers shorten the saving time by one to two years and allow households to purchase considerably larger homes. The vast majority of households, however, receives no transfers and purchases homes relying mainly on its own savings.

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  1. 31 July 1996
    No. 275 - Intergenerational Transfers, Borrowing Constraints and the Timing of Home Ownership
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