UCL Department of Economics


Gonzalo Paz-Pardo

Gonzalo Paz-Pardo


Gonzalo Paz-Pardo - Website


Research interests

Primary: Macroeconomics
Secondary: Household Finance and Labour Economics

Paper Title - 'Homeownership and Portfolio Choice over the Generations'

Abstract - Earnings are riskier and more unequal for households born in the 1960s and 1980s than for those born in the 1940s. At the same time, despite the improvements in financial conditions that made it easier to borrow, younger generations are less likely to be living in their own homes than older generations at the same age. By using a rich life-cycle model with housing and portfolio choice that includes flexible earnings risk and aggregate asset price risk, I show that changes in earnings dynamics account for a large part of the reduction in homeownership across these generations.

Lower-income households find it harder to buy housing, and some households delay homebuying decisions because their income is more unstable. Relatively looser borrowing constraints help to explain how the 1980s cohort bought houses in a context of risky earnings and high house prices, and the reduction in the cost of access to financial markets can explain the increase in stock market participation over different generations.


  • Professor Mariacristina De Nardi
  • Professor Morten O. Ravn
  • Professor Richard Blundell
  • Professor Orazio Attanasio