The Impact of Changing Demographics and Pensions on The Demand for Housing and Financial Assets

Publication date: 1 Jan 2006 | Publication type: NIESR Discussion Paper | External Author(s): Ale_ ˇCern_ and David Miles | JEL Classification: H31, H55, C61, G11 | NIESR Discussion Paper Number: 267

Using a calibrated OLG model with several sources of uncertainty we find that the impact of ageing and of reform of social security upon the demand for housing and the level of owner occupation is substantial. The overall structure of household asset holdings - in particular the split between real and financial assets - is sensitive to demographics and to the generosity of state run, pay-as-you go pensions. The interaction between social security reform and housing market conditions is significant and suggests that any changes in pension rules will have substantial knock on effects on the housing market.

Keyword tags: 
pension reform, portfolio allocation, housing, OLG model