Does High Home-Ownership Impair the Labor Market? PDF Download

Author: David G. Blanchflower
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 30

View

Book Description
We explore the hypothesis that high home-ownership damages the labor market. Our results are relevant to, and may be worrying for, a range of policy-makers and researchers. We find that rises in the home- ownership rate in a U.S. state are a precursor to eventual sharp rises in unemployment in that state. The elasticity exceeds unity: a doubling of the rate of home-ownership in a U.S. state is followed in the long-run by more than a doubling of the later unemployment rate. What mechanism might explain this? We show that rises in home-ownership lead to three problems: (i) lower levels of labor mobility, (ii) greater commuting times, and (iii) fewer new businesses. Our argument is not that owners themselves are disproportionately unemployed. The evidence suggests, instead, that the housing market can produce negative 'externalities' upon the labor market. The time lags are long. That gradualness may explain why these important patterns are so little-known.

Author: Štěpán Mikula
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

View

Book Description
We study whether homeownership hinders labor force participation and increases unemployment. Using a unique dataset from the city of Brno, Czech Republic, we exploit housing reforms that followed the Velvet Revolution, and the subsequent fall of communism, as a source of exogenous assignment of homeownership. Across several estimation approaches, we do not find any evidence of homeownership hindering labor market activity. The estimated effects on labor force participation are around zero and our estimates for unemployment suggest that homeownership reduces it by four to six percentage points. Homeownership thus appears to benefit labor market perfomance.

Author:
Publisher:
ISBN:
Category : Home ownership
Languages : en
Pages : 68

View

Book Description

Author: Nathalie Havet
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

View

Book Description
While many countries have implemented various incentives to promote home- ownership, this paper investigates the literature on the relationship between this residential status and the labour market performances. Since the rather nega- tive original contribution by Oswald (1996), the literature has been extending the analyses to more precise measures of labor markets performances, to more subtle descriptions of residential status and to more sophisticated econometric techniques on individual data. Overall, the Oswald's hypothesis finds little support.

Author: Nuno Crato
Publisher: Springer
ISBN: 3319784617
Category : Political Science
Languages : en
Pages : 344

View

Book Description
In the light of better and more detailed administrative databases, this open access book provides statistical tools for evaluating the effects of public policies advocated by governments and public institutions. Experts from academia, national statistics offices and various research centers present modern econometric methods for an efficient data-driven policy evaluation and monitoring, assess the causal effects of policy measures and report on best practices of successful data management and usage. Topics include data confidentiality, data linkage, and national practices in policy areas such as public health, education and employment. It offers scholars as well as practitioners from public administrations, consultancy firms and nongovernmental organizations insights into counterfactual impact evaluation methods and the potential of data-based policy and program evaluation.

Author: Karin Kurz
Publisher: Stanford University Press
ISBN: 0804767246
Category : Business & Economics
Languages : en
Pages : 408

View

Book Description
This cross-national comparative study analyzes the relationship between social inequality and the attainment of home ownership over the life course in 12 countries.

Author: Julie Beugnot
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

View

Book Description
In this paper we analyse the link between homeownership and various aggregate and individual labour market outcomes. Our aim is to investigate the likely consequences of public policies that promote homeownership. To this end, we develop a circular firm-worker matching model with Nash-bargained wage setting and free market entry. Homeowners are assumed to be less mobile than tenants and to bear higher mobility costs. Our numerical exercises show that tenants usually have lower unemployment rates and lower wage rates than homeowners. Importantly, workersʼ performances do not necessarily improve following an increase in the proportion of homeowners. The latter crucially depends on the relative utility enjoyed by homeowners and tenants when unemployed. In the aggregate, nevertheless, we find that the unemployment rate generally increases following an increase in the proportion of homeowners. Yet, the link between the two can be reversed if the homeownersʼ utility is lower than that of tenants when unemployed. Our model thus identifies a number of conditions under which Oswaldʼs conjecture is likely to hold or not. Thus, our results do not necessarily support the view that policies fostering homeownership are adequate public policies given their potentially negative effect on the labour market.

Author: George Mawuli- Akpandjar
Publisher:
ISBN:
Category :
Languages : en
Pages : 128

View

Book Description
This dissertation consists of three papers on the effect of homeownership on labor market outcomes. In the first paper, I developed a one-sector two-region endogenous job search model and show that when jobs arrive from both local labor market and non-local labor market, homeowners: are less likely to be unemployed than renters; and have higher overall search intensity and exit rate than renters. I then estimate the effect of homeownership on unemployment using a panel data set aggregated from the American Community Survey data from 2003 to 2011 and use relative cost of owning a home as instrument for homeownership. I also estimate models at the individual level. Regression results show that homeownership is negatively and significantly related to unemployment confirming the theoretical predictions. These results are robust to different estimation methods and specifications. The second paper evaluates the effect of homeownership on unemployment spell using the March Current Population Survey (CPS) data 1990 to 2013. Using duration models, I find that when transition from unemployment to different types of employment (full time and part-time) is ignored, homeownership decreases the probability of exiting unemployment. However, when the transition to different types of employment is considered, homeowners compared to renters have a lower probability of exit into full-time employment but have a higher probability of exit into part-time employment. Results from competing risk models when the transition into full-time and part-time employments are modeled simultaneously also exhibit similar patterns. The final paper investigates job search intensity by unemployed homeowners and renters in the US using the American Time Use Survey (ATUS) data from 2003 to 2013. I use Ordinary Least Squares and two-limit Tobit methods to estimate my models. The findings from regression results across different specifications of the two models estimated using the full sample shows that, on average, homeowners search for jobs less intensively compared to renters. However, when the sample is disaggregated into different unemployed groups, I find that while job losers and temporary layoff homeowners search for jobs more intensively than renters, homeowners who are re-entrant and job leavers search for jobs less intensively than renters.

Author: Daniel Ringo
Publisher:
ISBN:
Category :
Languages : en
Pages : 35

View

Book Description
This paper estimates the effect of home ownership on individuals' unemployment. Because of higher moving costs, home owners will be less willing than renters to re- locate for work and could therefore face longer unemployment spells. Estimation is complicated by the endogeneity of ownership, as owners will have different abilities, preferences and job prospects than renters. I instrument for home ownership using a preference shifter from the worker's childhood environment. The results indicate that home ownership is a significant hindrance to mobility, and homeowners suffer longer unemployment spells and more frequent job loss because of it.

Author: XUE HU
Publisher:
ISBN:
Category :
Languages : en
Pages : 178

View

Book Description
These essays contribute towards our understanding of housing and labor economics. This dissertation is composed of three chapters. In the first chapter, I explore the impact of negative housing equity on households' geo- graphical mobility using data from Panel Study of Income Dynamics. The empirical analysis implies that addressing the endogeneity nature of homeowners' underwater mortgage status is crucial. Even with comprehensive controls for households' demographic characteristics and macro-level factors, omitted variable bias such as homeowners' attitudes towards their financial responsibility may still generate estimation bias that is quite large. After proper instrumenting for homeowners' underwater mortgage status using local shocks from housing and labor markets, the estimation results show that having underwater mortgages is associated with an average decline in mobility rate of about 17 percentage points. The second chapter investigates the role of housing choice and mortgage on employment transitions when there are uncertainties regarding income and house prices. Motivated by the empirical evidence on large employment-transition disparities between homeowners and renters, I develop and estimate a structural model in which mortgage obligations motivate homeowners to exert greater job-search efforts during unemployment spells. The model is used to understand individuals' response to housing and labor market shocks. I find that while the decline in house prices creates negative labor market externalities for renters, tightening mortgage constraints result in greater job search incentives for homeowners. With concurrent negative labor market shocks, the probability of transitioning out of unemployment for both renters and homeowners declines. Two policy experiments are conducted. The first shows that lower refinance cost discourages housing equity accumulation and is associated with a decline in the average employment rate. The second demonstrates that a lower down payment requirement encourages the transition into home ownership, which has positive labor market implications, especially for younger individuals. The first two chapters explore the relation between underwater mortgage and geographical mobility and impacts of mortgage debt obligation on employment incentives. Both analyses are based on individual-level data. The last chapter investigates the mysteries of regional housing market disparities from a macro perspective. This chapter shows that local economic conditions are correlated with deviations between house prices and rents in a price-rent model framework, suggesting that the demand for credit and housing is greater when a variety of local economic conditions are more supportive. Several different measures of local economic conditions are considered in this chapter: local unemployment rates, local unemployment rates relative to the natural rate of unemployment, local inflation rates, and measures of local perceptions of the cost of credit. This chapter attempts to offer explanations not as how or why house prices increased, but rather, given the myriad of national factors making home purchase easier and cheaper, where house prices increased. This approach also resolves a bit of a puzzle as to why the housing bubble was so pronounced in some areas and not others.