This paper examines the impact of access to housing on fertility rates using random variation from housing credit lotteries in Brazil. For 20-25-year-olds, we find that obtaining housing increases the average probability of having a child by 32% and the number of children by 33%, with no increase in fertility for people above age 40. The lifetime fertility increase for a 20-year old is twice as large from obtaining housing immediately relative to obtaining it at age 30. Individuals relocate to areas with lower crime rates, higher per capita income, and higher home-ownership rates, creating more favorable conditions for raising children. The increase in fertility is stronger for households in areas with lower quality housing, greater rental expenses relative to income, and those with lower household income and lower female income share. These results suggest that easing housing credit and physical space constraints can significantly increase fertility.

We estimate the preferences of individuals from different wealth backgrounds to explain intergenerational wealth mobility. We use rich micro-level data on the balance sheets, consumption, and risky investments of Swedish residents, together with family wealth background measured during the offspring’s early adulthood. We find that patience and risk-tolerance are strongly correlated with wealth background. Counterfactual analyses reveal that background-dependent preferences can explain at least 75 percent of the wealth gap between adults of non-rich backgrounds (90 percent of the population) and very-rich backgrounds (2.5 percent of the population). In contrast, early-adulthood heterogeneity in wealth, gifts and inheritances, and intergenerational transmission of human capital are not dominant determinants of wealth mobility.

A recent literature has shifted the focus from heterogeneity in labor income to heterogeneity in capital income in explaining features of the wealth distribution. We first document that a common unobserved component (which we interpret as the endowment of skills) drives persistent heterogeneity in both wealth returns and labor earnings. We embed these features of the joint wealth return-earnings process in a life-cycle model of consumer behavior and show that ignoring them would dramatically understate average returns for people at the top of the wealth distribution as well as the level and rise of consumption inequality over the life cycle.