Housing Affordability and Parental Income Support Staff Working Paper 2024-28 Jason Allen, Kyra Carmichael, Robert Clark, Shaoteng Li, Nicolas Vincent In many countries, the cost of housing has greatly outpaced income growth, leading to a housing affordability crisis. Leveraging Canadian loan-level data and quasi-experimental variation in payment-to-income constraints, we document an increasing reliance of first-time homebuyers on financial help from their parents, through mortgage co-signing. We show that parental support can effectively relax borrowing constraints—potentially to riskier borrowers. Content Type(s): Staff research, Staff working papers Topic(s): Financial services, Financial system regulation and policies, Housing JEL Code(s): D, D6, D64, E, E2, E21, E24, G, G1, G18, G5, G51
Inequality in Parental Transfers, Borrowing Constraints and Optimal Higher Education Subsidies Staff Working Paper 2019-7 Youngmin Park This paper studies optimal education subsidies when parental transfers are unequally distributed across students and cannot be publicly observed. After documenting substantial inequality in parental transfers among US college students with similar family resources, I examine its implications for how the education subsidy should vary with schooling level and family resources to minimize inefficiencies generated by borrowing constraints. Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Potential output, Productivity JEL Code(s): D, D1, D14, D6, D61, D64, D8, D82, I, I2, I22, J, J2, J24