Events

Prof. Kaiji Chen
Professor of Economics
Department of Economics
Emory University

How can emerging economies transfer resources from richer future generations to current cohorts so that the latter can share the gains from rapid economic growth? We propose a housing-based mechanism: subsidized access to housing for early cohorts generates intergenerational redistribution through asset price appreciation. In an overlapping-generations model, initial cohorts purchase housing at below-market prices and realize capital gains as wages and housing demand grow, with future cohorts implicitly financing these gains through higher housing prices. Calibrated to China’s large-scale housing reform, the model shows that this mechanism increases homeownership, raises welfare for both initial and future cohorts through inter vivos transfers, and yields smaller government deficits than pension-based transfers when income growth slows.