Simulating trends in housing wealth inequality in post-socialist Czech society

The goal of this paper is to predict, by using microsimulation modelling under alternative market scenarios, housing wealth inequality in Czech society up to the year 2050. These predictions can be useful for assessing the rationale for attempts to use housing assets as a way of supplementing state pensions; and thus add to existing studies on asset-based welfare (ABW) that focused only on the recent and past situation. The models predicted small increase in housing wealth inequality among the future elderly but larger increases in inequality in the society as a whole. Rise in wealth inequality was especially steep when consumption of housing assets by future elderly was accompanied by an interruption of financial transfers to the next generations. Reduction of intergenerational transfers may thus significantly enhance wealth inequality in a society and thus pose a risk to social peace. We showed that similar outcome may appear in broader number of countries, including those with much lower homeownership rate.