Parental transfers and house prices

Parents transfer substantial wealth to their children during their lifetime, yet the timing and consequences of these inter vivos transfers remain poorly understood. In his research Jonas Wogh shows that most parental transfers occur around first-time home purchases, while transfers are largely unrelated to other life events. Because they are predominantly received by already wealthier children, these transfers increase absolute wealth inequality in the short run. 

Jonas also identifies the causal effect of parental home purchase transfers on housing outcomes and subsequent wealth accumulation, exploiting exogenous variation from a Dutch tax-exemption policy. While transfers promote wealth accumulation by enabling homeownership, recipients use them primarily to reduce mortgage debt. As a result, the initial wealth gains dissipate over time, as recipients consume the savings from lower debt service rather than reinvesting them.

Watch the short video in which he explains his analysis ->

Do you want to know more about the results of this project?

Please download and read the full paper below