Über die Autorin bzw. den Autor

Karin Kurz is Assistant Professor of Sociology and Hans-Peter Blossfeld is Professor and Chair of Sociology at the Otto-Friedrich University, Bamberg.

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HOME OWNERSHIP AND SOCIAL INEQUALITY IN COMPARATIVE PERSPECTIVE

STANFORD UNIVERSITY PRESS

Contents

Tables and Figures.......................................................................................................................................ixContributors.............................................................................................................................................xvCHAPTER ONE Introduction: Social Stratification, Welfare Regimes, and Access to Home Ownership Karin Kurz and Hans-Peter Blossfeld.....................1CHAPTER TWO Home Ownership and Social Inequality in West Germany Karin Kurz............................................................................21CHAPTER THREE Home Ownership and Social Inequality in France Monique Meron and Daniel Courgeau.........................................................61CHAPTER FOUR Home Ownership and Social Inequality in Belgium Veerle Geurts and Luc Goossens............................................................79CHAPTER FIVE Home Ownership and Social Inequality in the Netherlands Clara H. Mulder...................................................................114CHAPTER SIX Home Ownership and Social Inequality in Denmark Sren Leth-Srensen........................................................................141CHAPTER SEVEN Home Ownership and Social Inequality in Norway Lars Gulbrandsen..........................................................................166CHAPTER EIGHT Home Ownership and Social Inequality in Italy Fabrizio Bernardi and Teresio Poggio.......................................................187CHAPTER NINE Home Ownership and Social Inequality in Spain Anna Cabr Pla and Juan Antonio Mdenes Cabrerizo...........................................233CHAPTER TEN Home Ownership and Social Inequality in Britain John Ermisch and Brendan Halpin............................................................255CHAPTER ELEVEN Home Ownership and Social Inequality in Ireland Tony Fahey and Bertrand Matre..........................................................281CHAPTER TWELVE Home Ownership and Social Inequality in the United States George S. Masnick.............................................................304CHAPTER THIRTEEN Home Ownership and Social Inequality in Israel Noah Lewin-Epstein, Irit Adler, and Moshe Semyonov.....................................338CHAPTER FOURTEEN Summary and Conclusions Karin Kurz and Hans-Peter Blossfeld...........................................................................365Index....................................................................................................................................................379

Chapter One

Karin Kurz and Hans-Peter Blossfeld

Traditional social stratification research concentrates on labor market inequalities in income, class, and socioeconomic status, and on how those inequalities are brought about through the influence of the family of origin or education (Blau and Duncan 1967; Erikson and Goldthorpe 1992). Although home ownership is the most important form of family wealth-it greatly affects both the living conditions and financial security of households-it has rarely been a topic of social stratification research. That omission is astonishing because access to home ownership might well deepen labor market inequalities (Forrest and Murie 1995a); alternatively, it might serve to level out those inequalities to some extent. The main proponent of the latter position is Saunders (1990), who describes Britain as a property-owning democracy in which a broad mass of households own homes and class position has lost much of its significance. Saunders's view is close to the popular theory that individualization in present-day society is increasing, the belief that traditional social collectives-based on class or ascribed characteristics, for example-have lost their significance in shaping the lives of individuals (Beck 1986, 1994).

The study of housing and tenure type (ownership versus tenancy) has been left mostly to the specialized field of housing research, which does not have strong links to general social inequality research. Housing studies tend to concentrate on housing conditions and policies, and only rarely address stratification issues (cf. Kemeny 1992). An exception are British studies that investigate whether home ownership is a determinant of life chances independent of labor market position and whether home ownership alters class consciousness and voting behavior (Forrest, Murie, and Williams 1990; Saunders 1990). Discussion in this field, however, is mainly confined to the United Kingdom: it has not stimulated systematic international comparisons. In contrast, cross-national studies of housing policies in European countries and other industrialized nations have been conducted (see, for example, Boelhouwer and van der Heijden 1992; Doling 1997; and McCrone and Stephens 1995). Moreover, quite recently attempts have been made to link housing policy studies with research on welfare states (Barlow and Duncan 1994; Castles and Ferrera 1996; Doling; Kemeny).

At the same time, economists, geographers, and demographers have undertaken empirical analyses of the determinants of tenure type. Using a cost-benefit framework, economists have mainly focused on the income elasticity of housing demand and consumption, as well as on the probability of owning versus renting. Demographers and geographers have put more emphasis on linking tenure choice to regional and temporal contexts and to events in the family life cycle (cf. Clark, Deurloo, and Dieleman 1994, 1997; Mulder and Hooimeijer 1995). In these fields, recent quantitative studies increasingly use a life course framework and methods of transition data analysis (see, for example, Courgeau and Lelivre 1992; and Mulder and Wagner 1998). But here, too, cross-national studies are rare; and in almost none of these contributions has the question of differential access to home ownership been studied in a stratification framework (cf. Mulder and Smits 1999). From these diverse research traditions, we take up, on the one hand, the social stratification perspective and, on the other, the interest in understanding country differences by referring to different cultural and institutional contexts. Moreover, we apply a life course perspective.

HOUSING TENURE AND SOCIAL STRATIFICATION

In traditional stratification research, the labor market is considered the central institution: it determines life chances. The main focus of that research, then, is on the position of the individual in the labor market and within work organizations, which is interpreted in terms of class position, social standing, or the living standard of an individual or household.

Social mobility studies coming from this research tradition typically ask two related sets of questions (see, for example, Erikson and Goldthorpe 1992): First, to what extent does class structure change between generations? If there is mobility between generations, is it simply a function of change in the occupational structure, or is it caused by a greater openness in society? Second, do children who come from different social backgrounds have equal opportunities? In industrial and postindustrial societies, is there a trend away from ascription toward achievement? That is, what role does educational achievement-versus the influence of the family of origin-play in determining an individual's job and resultant position?

It is clear that understanding the mechanisms of how occupational position is attained is relevant only if labor market position actually does shape the life chances of individuals. In his individualization hypothesis, Beck (1986, 1994) attacks this proposition with several arguments. He states that, as educational opportunities expand, and as geographic and occupational mobility increases, family and class become less important determinants of the individual's life course. At the same time, he suggests, social class (and other social collectivities) loses its subjective relevance and people begin to interpret labor market risks (unemployment is one example) in terms of individual risk, not class risk. Finally, Beck expects that labor market risks, once confined to specific disadvantaged groups, spread to everyone in the labor market.

Social stratification researchers point to empirical findings that contradict Beck's assumptions, in particular the first and third arguments. Family background still plays an important role in shaping the individual's life course both directly and indirectly: family resources influence educational opportunities, which in turn influence occupational position (see, for example, Erikson and Goldthorpe 1992; Shavit and Blossfeld 1993; and Shavit and Mller 1998). At the same time, labor market risks are clearly structured by education and first occupational position (Blossfeld, Klijzing, Mills, and Kurz forthcoming; Brauns, Gangl, and Scherer 1999; Gangl 2001; Kurz, Steinhage, and Golsch 2001; Shavit and Mller).

If the labor market still structures life chances, why should home ownership be of interest to the study of social inequality? The basic argument is that household assets-including a home-affect the household's standard of living, social standing, and wealth. Social stratification researchers typically would argue that it is not necessary to consider home ownership (or, more generally, household assets) because access to home ownership closely follows the class, occupation, or earnings of individuals and households. In fact, that argument fails on at least two counts. First, it is obvious that assets can be transferred from one generation to the next, which means that a household's standard of living and wealth do not simply reflect its labor market position. Research has shown unequivocally that individuals in favorable labor market positions are more likely to receive inheritances or gifts from their families (see, for example, Forrest and Murie 1995a; Hamnett 1991; Kendig 1984; and Lauterbach and Lscher 1996). But most people are age 40 or older when they receive an inheritance-an age at which tenure decisions typically have been made (Bonvalet 1995; Forrest and Murie; Hamnett; Lauterbach and Lscher). On the basis of that finding, some authors have argued that intergenerational transfers have little impact on first home ownership and the household's living standard (Lauterbach and Lscher; Munro 1988). We would still argue that inheritances are important because they can be used in various ways to improve a household's economic and social situation. In addition, it is well documented that inter vivos transfers play an important role in access to home ownership (Castles and Ferrera 1996; Forrest and Murie 1995b; Motel and Szydlik 1999). Family resources, then, can facilitate access to home ownership.

Saunders (1978, 1990) raised a second issue: because real property tends to gain or lose value over time, home ownership itself-independent of labor market position-can affect a household's living standard and wealth. In the three decades after World War II, inflation increased the price of housing in virtually all Western countries. Hence, home ownership came to be viewed as an independent factor in the distribution of social inequality.

The crucial question here is whether home ownership can alter social inequality that the labor market has produced. Three scenarios are possible:

Capital gains closely mirror the differential class and income positions of households, and so have little effect on social inequality.

Upper classes realize higher capital gains, widening class differences in wealth and living standards.

Capital gains are similar across groups, reducing the distance between upper and lower classes.

Saunders (1990) found support for the third scenario in an empirical analysis of housing prices in three towns in Great Britain. But his results have been questioned by several authors. Forrest and Murie (1995a), for example, argue that Saunders's method-calculating the rate of return on the initial deposit-is faulty, that it is more instructive to refer to absolute returns on purchase price. When absolute returns are used, a relationship between class and property value (the second scenario) becomes clear.

In summary, labor market-induced inequalities in a household's standard of living and wealth are deepened to the extent that (1) intergenerational transfers increase access to home ownership, and (2) lower social classes realize smaller capital gains through home ownership than do upper social classes, which is very likely. Analyzing these relationships contributes to our understanding of the relevance of family transfers and home ownership as sources of inequality independent of the labor market. Although the country-specific case studies in this book do not focus on the second issue, the role of intergenerational transfers is investigated for several nations: West Germany, the Netherlands, Denmark, Italy, and Israel.

But an even more basic question needs to be asked (Savage, Watt, and Arber 1992): To what extent does access to home ownership depend on a household's class and income? A weak relationship, like that suggested by Saunders, would support the view of an individualized society, a society in which social cleavages along class lines are losing much of their importance. Of course, this assumes that home ownership is an important determinant of living standards. So one of the main topics addressed in this volume is how the probability and timing of access to home ownership are related to occupational class. Following Erikson and Goldthorpe (1992, 37), we understand class in terms of labor market position and position within production units. For the questions studied in this book, we believe class is more relevant than the household's current income because class typically is linked to specific expectations with respect to the development and stability of earnings over the working life.

It needs to be added, though, that even if the class position of a household proves to be unimportant for access to home ownership, class position may still play an indirect role in that access. Key here is the close relationship between class position and the likelihood of receiving intergenerational transfers. Also, even when we find a broad middle mass of homeowners, with little class differentiation, the size and quality of housing may well be class dependent. This issue is addressed in the discussion of Norway in Chapter 7.

WELFARE REGIMES AND HOUSING TENURE

In our discussion to this point, we have not touched on the role that country-specific history, cultures, institutions, and economic development play in the attainment of home ownership. It goes without saying that this omission is unrealistic. Home-ownership rates vary tremendously among countries that are similar in terms of economic development but differ in other respects. For example, in the countries under study in this book, homeownership rates range from 42 percent in West Germany to about 80 percent in Norway and Spain. Can these differences be related to a welfare regime classification?

Although the state subsidizes housing in virtually all industrial and postindustrial nations, research has remained remarkably silent on the nature and role of housing policy in different types of welfare regimes (cf. Kemeny 1992, 79ff.). Kemeny (1981) was among the first to direct attention to the relationship between a state's housing policy and the rate of home ownership. His basic argument is that the differences in the rates of home ownership in industrial societies must be understood in terms of divergent "dominant ideologies." He distinguishes two fundamental ideologies: individualistic (or privatist) and collectivist. The former favors individual solutions for the welfare of citizens; the latter, solutions in which costs are pooled in some way. In nations where collectivist ideology dominates over an extended period, a well-developed welfare state arises. One area in which the differences between individual and collectivist solutions are visible in the social structure is housing tenure. In his original (1981) work, Kemeny argued that home ownership is a privatist solution to the housing problem and that renting is a collectivist solution. His thesis: in countries like Australia and the United States, where privatist ideology prevails, rates of home ownership should be higher and public spending on housing lower than they are in countries like Sweden, Germany, and the Netherlands, where collectivist ideology is dominant. He tested that thesis by looking at home-ownership rates and welfare state spending in a small number of countries, and found the expected negative correlation. Later analyses of a larger number of countries tend to confirm the relationship (cf. Castles and Ferrera 1996; Schmidt 1989).

The negative correlation between home-ownership rates and state spending on housing is further explained by the lifetime costs of home ownership. When homes are privately owned-versus rented-the lifetime costs of housing typically are skewed: initially costs are high; over time they fall slowly, becoming very low in old age. Kemeny (1992) believes that high housing costs at the start of home ownership are "a structural deterrent to both high taxes and high levels of social security (payments)" (122). In a sense, then, home ownership and pensions are alternative routes to social security in old age (Castles 1998; Castles and Ferrera 1996; Kemeny 1981, 1992). In a society where home ownership is widespread, public old-age pensions can be smaller.

Esping-Andersen (1990, 1999) used institutional contexts to differentiate among welfare states. In his typology, he does not take into account housing systems and policies. He focuses instead on the social insurance systems that buffer the risks attached to employment-unemployment, sickness, old age-and on policies directed at child care and female employment. Nor does Esping-Andersen cite ideology as a driving force behind the development of the welfare state and the social structure in general. He is a proponent of "labor movement theory," which argues that labor unions and labor parties have been more or less successful in shaping government policies.

Despite differences in their basic approaches-dominant ideology on the one hand and political actors on the other-both Kemeny and Esping-Andersen identify a fundamental split in the development of social policy: a collectivist/social democratic version versus a privatist/liberal version. And Esping-Andersen refines that split by adding a third contingent, the conservatives. In a conservative welfare regime, the state exhibits less of an interest in equalizing the living conditions of its citizens and is less active in fostering equality between the sexes than the state in social democratic welfare regimes.

One of the most important developments in Esping-Andersen's more recent work is the distinction he makes among the three main societal institutions that provide welfare services-state, market, and household (also see Rose 1986a)-and their association with the three regime types. In the social democratic regime, state activities are comprehensive and are intended to reduce social inequalities and to foster equality between the sexes. Neither the market nor the family is expected to be a major welfare provider. In contrast, in the liberal regime, welfare services typically are bought on the market; state support is residual and means tested. The liberal regime does not rely on the family to provide welfare; but it also does not design policies to reduce the burden on those families, as the social democratic regime does. In the conservative regime, the family is expected to be a major service provider. The state is much less active in reducing social inequalities than it is in the social democratic regime; and the market is seldom called on for welfare services.

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