Homeownership and Public Pensions in East Asia: Is the Trade-Off Real?

Abstract This study examines whether homeownership has a trade-off relationship with public-pension development in Japan, South Korea, and Taiwan. Relying on a comparative historical approach, we find that while the three governments pursued homeownership societies, their interventions in housing provision and distribution varied in timing and intensity, contributing to different levels of homeownership. Historically, middle-class families in these countries have preferred asset accumulation through home purchases over reliance on public pensions. In particular, the early introduction of mandatory savings as a form of lump-sum retirement payments, combined with widespread homeownership aspirations, led to heavy reliance on private homeownership and, in turn, contributed to establishing underdeveloped, small-scale public-pension systems. Homeownership is unlikely to serve as a cornerstone of old-age economic security systems in East Asia, where asset-based welfare developed as a substitute for collective welfare provision and social rights.