Social security and elderly homeownership

Research output: Contribution to journalArticlepeer-review

25 Scopus citations


Over the last twenty-five years, the homeownership rate of households 65 years and older has risen steadily, while the homeownership rate for 35-64 year old households has remained relatively unchanged. At the same time, the real value of Social Security benefits has risen substantially. Using data from the March 1978 to 2001 Current Population Surveys, this paper documents the evolution and assesses the causal role of the Social Security program in increasing elderly homeownership. To isolate the causal effect, the analysis develops an instrumental-variable approach that relies on the large variation in benefits for birth cohorts from 1900 to 1930 due to double indexation of the system and the so-called Social Security "notch." For all elderly, the estimated elasticity of homeownership to Social Security benefits ranges from 0.26 to 0.49. Across marital groups, the widowed have the greatest responsiveness to benefits. Increases in benefits also increase household formation among the elderly. Overall, the estimates indicate that between half and as much as all of the time-series rise in elderly homeownership over the last twenty-five years can be attributable to the rise in Social Security benefits and suggest that reductions in benefits would alter homeownership among the elderly significantly.

Original languageEnglish (US)
Pages (from-to)280-305
Number of pages26
JournalJournal of Urban Economics
Issue number1
StatePublished - Jan 2008


  • Aging
  • Elderly
  • Homeownership
  • Household formation
  • Social security

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies


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