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Does High Home-Ownership Impair the Labor Market?
Abstract
The authors explore the hypothesis that high home-ownership damages the labor market. The results are relevant to, and may be worrying for, a range of policymakers and researchers. The authors find that rises in the home-ownership rate in a US 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 US state is followed in the long-run by more than a doubling of the later unemployment rate. What mechanism might explain this? The authors 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. The argument is not that owners themselves are disproportionately unemployed. 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.
... The empirical evidence concerning the effects of homeownership on unemployment is even more ambiguous (see Havet and Penot, 2010, for a review). Aggregate-level studies generally find a positive correlation between unemployment and the share of owner-occupied housing, both within and across countries (Blanchflower and Oswald, 2013;Green and Hendershott, 2001;Isebaert et al., 2015;Oswald, 1996). Individual-level studies, by contrast, tend to find that homeowners, if anything, do better on the job market than renters in terms of unemployment risk, its duration, and wages (Barceló, 2006;Battu et al., 2008;Coulson and Fisher, 2002;Flatau et al., 2003;Munch et al., 2006;2008;Rouwendal and Nijkamp, 2010;Van Leuvensteijn and Koning, 2004). ...
... All of these are, however, subject to criticism. For instance, the much used regional homeownership rate has been criticized on account of potentially having a direct impact on labor market outcomes and also potentially being correlated with neighborhood characteristics that are in turn correlated with individual-level labor market outcomes (Blanchflower and Oswald, 2013;Coulson and Fisher, 2009;Laamanen, 2017). Similarly, although the same-sex of first two siblings predicts the presence of a third sibling, and thus can be thought as an exogenous housing demand shifter, it is also likely to affect parents' labor market outcomes through different channels than homeownership, violating the exclusion restriction. ...
... Homeownership is unlikely to be a major force that would generate unemployment through the decreased mobility of homeowners. However, this finding is limited to the direct channel and thus we cannot rule out possible effects through external channels suggested by Blanchflower and Oswald (2013). We believe that future research studying housing privatization processes in these regions and their labor-market effects may yield further insights about the effects of homeownership on the labor market. ...
Homeownership is believed to cause higher unemployment. This is because homeowners face higher mobility costs that limit their job search to local labor markets. Empirical tests of this prediction have yielded mixed results so far, possibly due to the endogeneity of homeownership. This paper proposes that the privatization of public housing in Central and Eastern Europe after the fall of the Iron Curtain was a substantial policy shock that generated largely exogenous assignment of homeownership to individual households. This facilitates a new test of the effects of homeownership on mobility and unemployment: First, our empirical results do not reject that homeownership reduces mobility. Second, our results are inconsistent with homeownership increasing unemployment.
... Despite evidence of both positive and negative effects of homeownership on the decision to be selfemployed (Chen and Hu 2018), the significance of homeownership in determining HBS has been under-researched, especially in developing countries. Homeownership can act as collateral for financing a new business, increasing the likelihood of self-employment (Blanchflower and Oswald 2013), and reducing costs associated with setting up new business locations (Reuschke 2016). However, it may also deter (self)employment due to the risks associated with business failure (Bracke et al 2014;Chen and Hu 2018). ...
... Firstly, homeownership is a financial asset in financing a business, known as the 'collateral effects', where houses act as collateral for securing loans (Chen and Hu 2018;Reuschke 2016). Secondly, studies suggest that owning a home may act as security and pose a risk by creating wealth or crowding out potential employment respectively, depending on circumstances (Blanchflower and Oswald, 2013). Thirdly, spatial or locational attributes can encourage small business formation, an aspect yet to be explored in the self-employment literature. ...
Understanding gender disparities in home-based self-employment (HBS) and their links to homeownership and socioeconomic factors is crucial for advancing sustainable development goals (SDGs) in Sub-Saharan Africa, especially Nigeria. This study uses data from the 2010/2011, 2012/13, 2015/16, and 2018/19 waves of the Nigerian General Household Survey (GHS). It employs random effect probit regression, the LASSO method for identifying predictors, and the Blinder–Oaxaca decomposition technique to analyse gender differences in nonlinear binary outcomes. The results show that female business owners are more likely to engage in HBS compared to males, highlighting the importance of gender equality (SDG 5) and decent work (SDG 8). While male entrepreneurs are mainly driven by profit, females prioritise balancing paid and unpaid work, reflecting motivations beyond profit within heterodox economics. Significant gender-differentiated impacts are observed in relation to monthly rent, post-secondary education, dwelling space, energy, and regional locations. Notably, the presence of children significantly increases female involvement in HBS, a trend not seen among males. Marriage also influences female participation, suggesting that marital circumstances and economic benefits play a role. These findings highlight the need for policies addressing gender-specific constraints, challenging traditional gender roles, and promoting inclusive human development within the SDG framework.
... The unemployment causes a recession in housing markets, which is also declared in (Schnure, 2005). However, Oswald (1999) and Blanchflower and Oswald (2013) propose that home-ownership increases the unemployment rate as it affects the labour mobility. Contrary to Oswald (1999) and Blanchflower and Oswald (2013), our study reveals that a rise in unemployment causes a decrease in the house prices as in (Branch et al., 2016). ...
... However, Oswald (1999) and Blanchflower and Oswald (2013) propose that home-ownership increases the unemployment rate as it affects the labour mobility. Contrary to Oswald (1999) and Blanchflower and Oswald (2013), our study reveals that a rise in unemployment causes a decrease in the house prices as in (Branch et al., 2016). vii. ...
This paper analyzes the effect of macro-economic, financial and commodity market indicators on housing markets. We compare the efficiency of the models generated by Generalized Linear Models (GLM) and Multivariate Adaptive Regression Splines (MARS) according to method free measures for estimating the housing market trend. These models are used for the first time to identify the influence of macro-economic indicators on housing markets and the estimation of the trend in housing markets to our best knowledge. The empirical analysis focuses on the US housing market, and the illustration of the proposed models is done through the monthly historical realizations of S\&P/Case-Shiller National Home Price Index (HPI) and the US macro-economic indicators over the period from 1999-January to 2018-June. It contributes to the literature by highlighting the interaction between macro-economic indicators and housing markets and analyzing the mechanism of housing markets. The findings indicate that the house price trends are estimated with more accuracy and these models capture the joint influence of explanatory variables. Further, the MARS method is shown to outperform GLM compared to the prediction and forecasting power.
... To account for the effect of extended unemployment benefits, we control for the maximum number of weeks people can potentially benefit from unemployment insurance at the state level (Farber and Valletta 2015). We also control for homeownership, as homeowners may be less mobile and more attached to the local labor market and hence face higher unemployment duration during an economic downturn (Blanchflower and Oswald 2013). In the last decade, some states have passed employment verification laws to protect native and legal immigrant employment against undocumented immigrants, particularly for the unskilled group. ...
... We also find that household size, number of children, being the head of household (or spouse) and race are not related to the length of unemployment duration. Similar to findings in the earlier literature (Valletta 2013;Blanchflower and Oswald 2013), we find no evidence that being a homeowner affects unemployment duration among immigrants. The controls for assimilation factors indicate that while being a recent immigrant (ten years or less since moving to the USA) is not related to longer unemployment spells, being a US citizen increases the probability of an immigrant remaining unemployed. ...
Guell and Hu (J Econom 133:307–341, 2006) propose a robust econometric estimator using repeated cross-sectional data in the context of duration/survival analysis where otherwise limited or no results are possible because reliable panel data at an individual level are missing. We present a detailed exposition of the Guell and Hu (GH) strategy and show a Monte Carlo simulation for unemployment duration where the GH method produces better estimates compared to panel data with individual matching errors. We further apply the GH model to examine the immigrant unemployment duration in the USA using the Current Population Survey data from 2001 to 2013 and focus on the role of the birth-country networks on the unemployment duration around the Great Recession. We find that birth-country networks measured at the state level significantly lower unemployment duration for all immigrants, and this effect is stronger during the pre- and post-recession periods than during the recession. We also find that networks are more effective in lowering duration for immigrants unemployed for 1–2 months than for immigrants who are unemployed for longer periods, and this effect is the strongest during the post-recession period. The findings are robust to different specifications and measures of networks including those measured at the local MSA level.
... (vi) The unemployment causes a recession in housing markets, which is also declared in [170]. However, Oswald (1999, [161]) and Blanchflower and Oswald (2013, [30]) propose that home-ownership increases the unemployment rate as it affects the labor mobility. Contrary to [161] and [30], our model shows that a rise in unemployment will cause a decrease in the house prices as in the study [32]. ...
... However, Oswald (1999, [161]) and Blanchflower and Oswald (2013, [30]) propose that home-ownership increases the unemployment rate as it affects the labor mobility. Contrary to [161] and [30], our model shows that a rise in unemployment will cause a decrease in the house prices as in the study [32]. ...
In the last two decades, academicians and professionals intending to study in any area of real estate and finance not only must master advanced financial mathematics concepts and mathematical/econometric models but also should be able to implement those concepts computationally to improve real estate markets' efficiency. This comprehensive thesis mainly aims to combine the theory of financial mathematics with an emphasis on real-life applications in keeping with the way, both investors and policymakers, in today's real estate markets. Unlike most studies on real estate markets, housing markets and mortgages, the thesis covers both non-parametric statistical modeling methods (Multivariate Adaptive Regression Splines (MARS) and Generalized Linear Models (GLM)) and stochastic calculus (Stochastic Differential Equations (SDE), Malliavin calculus theory) with Monte Carlo simulations, Capital Asset Pricing Model (CAPM) and Fama French three-factor model with its extensions. The thesis offers thorough models in the subject of housing markets and provides hedging strategies of default and prepayment options embedded into mortgage contracts. Along with with the theoretical aspects, the thesis presents numerous applications for pricing, investment decision, risk management via hedging strategies, and portfolio management. The numerical illustrations are on determining the housing market price drivers and the effect of large investors, house price forecasting by using the US housing market data, determining hedging strategies for both mortgage default and prepayment options by computing the hedging coefficients via using Monte Carlo simulations and analyzing the T-REITs returns performance in various aspects.
... Recent studies suggest that homeownership may produce significant social costs as well as social benefits. 1 In terms of social costs, it is argued that the lower mobility of homeowners may directly or indirectly increase unemployment rates (for recent contributions, see Blanchflower andOswald, 2013, andBroulíková, Huber, Montag, andSunega, 2018). With respect to the social benefits, a number studies document the positive association of homeownership with political participation and social capital formation (DiPasquale and Glaeser 1999;Hilber 2010), life satisfaction (Rossi and Weber 1996;Zumbro 2014), self-assessed health (Aizawa and Helble 2015;Rossi and Weber 1996), and children's educational outcomes (Aaronson 2000;Green and White 1997;Haurin, Parcel, and Haurin 2002). ...
... Recent studies suggest that homeownership may produce significant social costs as well as social benefits. 1 In terms of social costs, it is argued that the lower mobility of homeowners may directly or indirectly increase unemployment rates (for recent contributions, see Blanchflower andOswald, 2013, andBroulíková, Huber, Montag, andSunega, 2018). With respect to the social benefits, a number studies document the positive association of homeownership with political participation and social capital formation (DiPasquale and Glaeser 1999;Hilber 2010), life satisfaction (Rossi and Weber 1996;Zumbro 2014), self-assessed health (Aizawa and Helble 2015;Rossi and Weber 1996), and children's educational outcomes (Aaronson 2000;Green and White 1997;Haurin, Parcel, and Haurin 2002). ...
We study whether the positive effects of homeownership on political participation and social capital, found in developed market economies, extend to post‐communist countries. We use the privatization of publicly‐owned housing in post‐communist countries as an exogenous source of variation of homeownership status to identify its impact on political participation and social capital formation. We find that homeownership is strongly related to higher participation in local‐level and national elections. In post‐communist countries, homeownership is also related to higher social trust. However, the positive association between homeownership and volunteering found in developed market economies does not extend to post‐communist countries. Together, our results corroborate that homeownership is associated with positive social benefits. However, these effects are highly heterogeneous and context‐dependent.
... In more recent analysis, Blanchflower and Oswald (2013) revisit the relationship between home ownership rates and the level of unemployment in the US using a panel of state-level data. The approach adopts an autoregressive framework, effectively arguing that the relationship between home ownership and unemployment is not concurrent but rather occurs with a lag. ...
... Further, they find that the effect is much smaller in districts with higher skilled labour, suggesting a more nuanced relationship exists between home ownership, skills, area, labour supply and employment outcomes. Isebaert, Heylen and Smolders argue that the observed positive relationship between unemployment and home ownership at the aggregate level reflects the negative externalities identified by Blanchflower and Oswald (2013). ...
This study investigated the relationships between housing, housing markets and the labour market. It considered factors such as geographic mobility, reservation wages (i.e. the minimum wage that an unemployed individual can accept) and job search behaviours across a range of housing tenures.
... The initial supporting evidence for the thesis came from macro-level cross-sectional data from the 1960s and the 1990s. The hypothesis has recently been examined using a panel data set of US states over the sample period 1985 to 2011, Blanchflower & Oswald (2013). They found that an increase in home ownership leads to a delayed rise in unemployment, although the exact mechanism involved is difficult to identify. ...
... More recently Oswald had re-ignited the debate and used US state level data, within a panel framework, to analyse the relationship between unemployment and home ownership, Blanchflower and Oswald (2013). Although their procedures are relatively simple, they claim that home ownership has a delayed impact on unemployment but that the long-run elasticity is around 2. The exact mechanism is not clearly identified but home ownership was found to be associated with lower levels of labour mobility, longer times for commuting and lower levels of new business formation. ...
... However, due to unobserved individual characteristics it might often be difficult to isolate the impact of homeownership. 2 In addition, there are also studies which show either no significant positive effect of homeownership, inconclusive results, or even a negative impact (see for instance Engelhardt et al. 2010, Bourassa et al. 2015, or Kaas et al. 2019. What is more, a high homeownership rate might increase aggregate unemployment (Blanchflower andOswald 2013, Laamnanen 2017) 3 , and homeowners might be more likely to take issue with new residential developments in an area than renters (Levine Einstein et al 2018). 4 The favourable personal income tax treatment of owner-occupied property creates market distortions, which are only partially corrected through recurrent property taxes. ...
Mortgage interest tax relief contributes to the favourable tax treatment of owner-occupied housing compared to other investments. It thereby creates market distortions and may at the same time often not give rise to its intended effect, namely to increase homeownership. EU country-specific recommendations have asked for a reduction of the relief in Member States, also in view of risks to macroeconomic stability. The paper analyses the effects of removing mortgage interest tax relief on public revenue and expenditure, household disposable income and income inequality in 14 EU Member States with the microsimulation model EUROMOD. It finds that the tax relief largely benefits households at medium to high income levels. Consequently, its removal could help decrease income inequality in almost all Member States.
... Researchers have long been concerned about the impact of the housing market on the labor market [15][16][17] , while only start to notice that the HPR might have great impact on labor market. Scholars believe that the HPR has a significant inhibitory effect on population mobility. ...
With the rapid economic development, megacities have gathered a large number of population and industries, and a series of “urban diseases” have also emerged. To alleviate these problems, various administrative measures have been taken to control population and optimize industrial distribution. Meanwhile, home-purchase restriction (HPR) has been introduced to control the soaring housing prices. Existing research focuses on the impact of policy on its own market, without paying attention to the linkage between markets and spillover effect. We take Beijing, the capital of China, as an example to study the impact of the HPR on the population distribution and industry development of megacities. By analyzing the industry location quotient and population economy matching degree, we conclude that HPR effectively promotes the efficiency of population and industry dispersal, but increases the mismatching between industry and population. City is a typical intelligent system that gathers various intelligent agents, and the development of its population and industry is the fundamental evolution of the system. This paper explores the role of policies in the evolution of urban intelligent systems, and therefore has important theoretical and practical significance for intelligent systems.
... 7 Also, some studies show no significant positive effects of homeownership on these outcomes, have inconclusive results or even find a negative impact (see for example Engelhardt et al. 2010, Bourassa et al. 2016or Kaas et al. 2019. Moreover, homeownership might make labour suppliers less mobile and decrease employment (Blanchflower andOswald 2013, Laamanen 2017). 8 In addition, homeowners might be more likely to oppose new residential developments in an area, thereby limiting housing supply (Levine Einstein et al 2018). ...
A well-designed recurrent tax on residential property (RRPT) can be an important element of the tax mix being able to foster growth, address policy issues related to inequality and contribute to the green transition. Nevertheless, tax revenues from recurrent property taxes are low in EU Member States. The paper first examines the design of efficient property taxation, which also includes removing the homeownership bias in taxation. Subsequently, it provides an overview of RRPT policies in EU Member States and discusses the political economy of property tax reforms. Finally, potential RRPT reforms to reduce inequality and support environmental goals are explored. An RRPT with a progressive rate schedule and a regularly updated tax base factoring in the energy performance of the building is able to support growth, reduce income inequality and contribute to a sustainable environment.
... However, other studies argue that homeowners tend to be less mobile than renters and therefore less able to respond to changes in the local labour market. This can hamper the matching process between jobs and the labour force and increase unemployment (Blanchflower & Oswald, 2013). ...
In London, housing affordability has been rapidly declining over the past few decades. Furthermore, London, and the UK in general, has experienced persistent volatility in house prices, new housing supply, and housing finance. These features characterise the main aspects of London’s housing crisis which is the topic of this PhD. Our existing understanding of this crisis remains largely fragmented and mostly qualitative. In this thesis, I build a novel quantitative system dynamics model based on existing literature and statistical data to explain developments in London’s housing system since 1980, with a particular focus on the feedback loops between house prices and housing credit. The model is shown to be capable of endogenously reproducing the salient features of the system’s past behaviour, such as the excessive growth in prices and housing credit as well as the characteristic boom-bust cycles. Extending the simulation into the future under business-as-usual continues to generate exponential growth and increasingly larger amplitude oscillations. Furthermore, I simulate a number of policies aimed at mitigating the unchecked growth and volatility. Supply side policies considered include a steep increase in affordable housing construction, a relaxation of planning restrictions, and a combination of the two. These policies show promise in slowing the growth in house prices (and housing debt) but do little to curb market volatility. Demand side policies considered include introducing a capital gains tax on all residential property, lowering average loan-tovalue ratios, enforcing historically anchored property valuations for mortgage lending, and a combination of all three. These policies, particularly when combined, appear to be highly effective in eliminating periodic oscillations. They also serve to slow down the worsening of affordability to some extent, but demand-side policies alone do not appear capable of stopping the trend in deteriorating affordability. In order to eliminate largescale market volatility and simultaneously stop the continual worsening of affordability, it is shown to be necessary to intervene on both sides of the problem with a portfolio of targeted policies. In conclusion, I argue that the unit of analysis in housing policy and discourse must become feedback loops rather than individual factors. Integrated, feedback-centred, dynamic simulation tools are needed in long-term planning for the affordability and stability of the housing market in London and in the UK. The system dynamics model introduced in this thesis serves as a proof of concept for a promising approach to policymaking in the area of the UK’s housing policy.
... The Oswald-hypothesis states that higher levels of home ownership correlates with higher levels of unemployment, as a result of decreased labour mobility due to relatively high transaction costs related to buying and selling a house "... a lack of housing opportunities may distort the functioning of the labour market... potentially resulting in unemployment and unfilled vacancies." European Liberal Forum Policy Paper | Nov 2021 Housing Opportunities Instead of Market Responsiveness (Blanchflower & Oswald 2013;Borg & Brandén 2018;Wolf & Caruana-Galizia 2015). Van Leuvensteijn and Koning (2004), however, studied the Oswaldhypothesis in the Dutch context and found very little effect of home ownership on job changes. ...
This paper discusses the impact of the Dutch housing-policy reforms since 2011 in terms of housing opportunities for middle-income households in Amsterdam. The paper ends with a call to focus on securing affordable housing opportunities for different groups instead of a focus on market dynamism and responsiveness. While promoting affordable housing options for all income groups will increase freedom and security, the pursuit of labour mobility through market dynamism and responsiveness may also result in measures that harm welfare and well-being.
... If the aim is business as usual, then arguably the next best thing to preventing households from dropping out of ownership is having institutions appropriately arranged to nudge them back in. This is especially important if housing markets are to adjust more efficiently to labour markets (Blanchflower and Oswald, 2013), or respond effectively to relationship breakdown (Clark, 2013b). At the moment, there are initiatives (generally failing) to lever new households into the sector, and measures (relatively successful in the 21st century) to prevent owners from dropping out. ...
This paper provides an empirical overview of housing tenure transitions in Australia, the UK and the USA during a period of unprecedented economic instability in 2001–2017. Focusing on the neglected theme of episodic homeownership, we profile those who straddle the tenure divide by moving into and out of renting from time to time. Using panel data we model this ‘churn’ in three jurisdictions, showing that even the dislocation of a global financial crisis does not eclipse the independent impact of life events during rental spells. We find that whatever individuals bring from prior ownership, shocks occurring during a rental spell – unemployment, loss of a partner, additional dependent children – can be sufficient to prevent return. Churning is also health- and age-selective, adding ‘drop-out’ among the old to ‘lock-out’ for the young as a policy concern. Even those who successfully regain owner-occupation increase their credit and investment risks without necessarily improving their housing position. Overall ‘churners’ are a diverse constituency whose life chances are powerfully shaped by episodic ownership: what they share is time spent in an unacknowledged, under-instituted space between tenures where there is latent demand for innovative financial services and untapped potential for radical policy shifts.
... There is little evidence that higher rates of homeownership support stronger economies. Rather, empirical studies have found higher rates of unemployment correlate with high homeownership, due to less Private Landed Property and Finance mobile workforces (Blanchflower and Oswald 2013;Oswald 1999). High levels of homeownership reduce the efficiency of the distribution of labor and elevate the particular interests of property owners in opposition to community development. ...
This article examines the links between private property in land and the financial system. Private landed property (PLP) has played an important role in supporting the growth of modern banking and credit systems, industrialization, and economic democratization. However, since the 1980s, high‐income economies have exhibited a strong preference for PLP as a form of tenure, in the form of home ownership in particular. This pattern has combined with financial liberalization and innovation to create a land‐finance feedback cycle with negative social and economic outcomes. They include a housing affordability crisis for younger and poorer socioeconomic groups; rising wealth inequality as land rents have become more concentrated; economic stagnation due to capital misallocation; and increased financial fragility as household debt has exploded. We illustrate these historical processes in the Anglo‐Saxon “home‐owning democracies,” where they have been strongest, focusing in particular on the United Kingdom, Australia, and the United States. This article considers how alternative tenure arrangements and reforms to finance and taxation could help mediate these dynamics.
... Gabriel and Painter (2020) discuss societal consequences of the deterioration in rental housing affordability, with a focus on the United States. 2 See, for example, Caldera), Andrews, Caldera Sánchez, and Johansson (2011), Blanchflower and Oswald (2013, andCzerniak and Rubaszek (2018). ...
Many European economies have faced pressure from rental housing affordability that has widened social and economic divergence. While significant country and regional differences exist, this IMF departmental paper finds that in many advanced European economies a large and rising share of low-income renters, the young, and those living in cities is overburdened. In several locations, middle-income groups also increasingly face rental affordability issues. These groups have experienced particularly slow income growth amid rising rental prices. Disparities between renters and homeowners have widened over the past decade in an environment of low interest rates and housing policies that tend to be regressive and favor home ownership. Rental housing support for the segment of tenants most in need has often not kept pace with afford- ability pressures. These trends will likely intensify after the disproportionate COVID-induced contraction of contact-intensive service sectors, wherein many renters are employed, as well as the need to flexibly relocate to locations in which sectors are expanding. Apart from analyzing rental housing affordability across households’ income groups, location, and age cohorts in advanced European economies, this paper identifies key drivers of affordability in recent years. It also reviews experiences with policies in support of rental affordability.
... First, accessibility to public housing is stratified by income so that lower income households receive more support from the government. As a result, home ownership in Singapore is 91% (Department of Statistics Singapore, 2019), amongst the highest compared to other cities in developed countries (Andrews & Sánchez, 2011;Blanchflower & Oswald, 2013;Yates & Bradbury, 2010). Second, the location of all land uses, including residential areas, is managed by the government. ...
... Supplementing the view articulated in Oswald (1996) and related work, Blanchflower and Oswald (2013) find that increasing home-ownership rates are a precursor to rising unemployment, and suggest that lower worker mobility is primarily to blame. 24 The results suggest that the impact of high ownership rates on the labor market are significant at the macro level: a doubling of the rate of home-ownership can be followed in the long-run by more than a doubling of the unemployment rate. ...
... To the extent that the construction of more mf housing indeed causes a decrease in the homeownership propensity, our study has direct relevance for the voluminous literature on the social and economic consequences of homeownership. This literature suggests that homeownership is linked to housing maintenance (Galster, 1983), investment in local public goods such as public schools (Hilber and Mayer, 2009), investment in social capital (DiPasquale and Glaeser, 1999;Hoff and Sen, 2005;Hilber, 2010), labor market outcomes and entrepreneurship (Oswald, 1996;Blanchflower and Oswald, 2013;Harding and Rosenthal, 2017;Bracke et al., 2018) or local political participation and land use regulation (e.g. Fischel, 2000Fischel, , 2001Hilber and Robert-Nicoud, 2013;Ortalo-Magné and Prat, 2014;Ahlfeldt and Maennig, 2015). ...
We explore the effects of local economic conditions on the type and size of newly constructed housing units in a city. Exploiting the 1984–2004 metro area samples of the American Housing Survey and US Census building permit data from 1980 to 2018, we find that positive local income shocks (i) increase a city’s share of multi-family housing in new construction and (ii) trigger the construction of smaller units. These responses are driven by migration. Our findings are consistent with a modified open monocentric city model that more realistically assumes land is available for conversion into new housing throughout the city.
... For instance, the median household income for a typical homeowner in the United States is $72,500 a year, compared with a median household income of $37,500 for a typical renter in 2018 (Zillow Group, 2018). 4. Since homeowners are less mobile than renters, excessive focus on homeownership rates may increase unemployment rates, slow innovation and productivity, and increase political and economic inequality as homeowners favor restrictive zoning policies and other prohomeowner policies that disadvantage renters (Blanchflower & Oswald, 2013;Hall & Yoder, 2019). 5. For instance, nearly 9 of 10 mostly black-or African American-dominated ZIP Codes in metro Atlanta still have home values below the point they were at 12 years ago. ...
While the relationship between homeownership and community involvement is mixed and unclear, this study aims to contribute to this debate by further examining the relationship between these two. Using data from the 2019 Metro Atlanta Speaks survey, we find that homeowners and residents with longer community tenure have higher odds of being involved in the community compared with renters in the metro Atlanta region of the U.S. state of Georgia. Among various community activities examined, homeowners are associated with higher odds of participating in parent–teacher association meetings, neighborhood association meetings, and public meetings held by local governments. Because housing needs of and challenges faced by residents are different, a balanced and comprehensive housing policy ensuring safe, decent, and affordable housing options—rental housing and homeownership opportunities—is crucial in stabilizing homeownership rates and in keeping residents in their communities longer.
... They also find results concerning housing tenure that have considerable policy importance; council tenants (locked into provision by a specific local authority) are least likely to express willingness to move, while private tenants are the most likely, with owner-occupiers being in the middle. This last finding has stimulated a literature on the role played by housing tenure in exacerbating labour market rigidities; the Oswald (1996) hypothesis of a positive relationship between owner-occupation and unemployment rates has subsequently been investigated by, inter alia, Munch et al. (2006), Battu et al. (2008), Blanchflower, Oswald (2013) and Laamanen (2017). ...
Data from a bespoke Totaljobs survey of workers in the UK are used to revisit issue of workers’ willingness to migrate in order to enhance their career opportunities. Demographic variables such as age, gender, and family circumstances are found to have high explanatory power. Education is also an important cofactor, as is the individual’s current income – though the latter has a highly nonlinear effect. Workers located in the north east – a region relatively remote from other large population centres, and one with a strong and distinct cultural identity – are significantly less likely to express a willingness to move. The paper is novel in two respects: in identifying the role played by individual income in mobility, and in allowing for the potential endogeneity of variables associated with attitudes to risk-taking.
... Over recent decades, research has highlighted the importance of housing market developments for the wider economy. There are multiple interactions between the owneroccupied housing market and the macroeconomy, ranging from business start-ups (Reuschke, 2016), labour mobility and unemployment (Blanchflower and Oswald, 2013) to household expenditure (Muellbauer and Murphy, 2008). Given that the majority of household assets are held in the form of housing, any changes in the price of the family home are likely to affect individuals' wealth and to influence the broader economy. ...
The cross-regional dependency in the UK housing market is analysed using regional house price indices. In this article, a network approach based on partial correlations is proposed, along with rolling-window analysis to consider potential time-varying dependency. The results show that house prices in the outer South East region have the strongest influence on regional housing market interactions in the UK. This influence is stronger when the markets are highly interconnected, whereas the house prices in London have the strongest influence when the UK regional housing markets are relatively less connected.
... Green ve Hendershott (2001b) kiracı olan işsiz bireylerin, ev sahibi olan işsizlere göre daha kısa sürede işe girebildiklerini, yani Oswald hipotezini destekleyen sonuçlar raporlamışlardır. Mikro ve makro veriler ile ilgili tartışmaların sonucunda sonraki çalışmalarda söz konusu iki tür veriyi kullanma eğilimi başlatılmıştır (Munch, vd, 2006;Coulson ve Fisher, 2009;Blanchflower ve Oswald, 2013). ...
According to traditional related literature homeownership is considered as indicator of economic welfare. While unemployment has raised as major economic issue of the last century. Is there a link between unemployment and homeownership? Regarding this question Oswald hypothesis has been tested for several economies in literature. The aim of this study is to investigate Oswald hypothesis using cross-sectional data set for 81 province of Turkey. To the best of our knowledge it is the first study that tests the Oswald Hypothesis for Turkey taking into account spatial dependency among regional unemployment rates. Empirical results show that home ownership has a negative and significant effect on unemployment. However, the results of this study is contradict with Oswald Hypothesis.
... SeeMoretti (2011) for a comprehensive overview of this literature going back toRoback (1982) andRosen (1979), and Diamond (2016) and Piyapromdee (2019) for recent applications.3 In general, the relationship between homeownership and labor market mobility or unemployment has been discussed in many other places, and an incomplete list might includeOswald (1996);Blanchflower and Oswald (2013),Coulson and Fisher (2002),Güler and Taskın (2011), Battu et al. (2008) orHalket and Vasudev (2014). ...
This paper estimates a lifecycle model of consumption, housing choice, and migration in the presence of aggregate and regional shocks, using the Survey of Income and Program Participation (SIPP). The model delivers structural estimates of moving costs by ownership status, age, and family size that complement the previous literature. Using the model, I first show that migration elasticities vary substantially between renters and owners, and I estimate the consumption value of having the option to migrate across regions when there are regional shocks. This value is 19% of lifetime consumption on average, and it varies substantially with household type.
... Kokonaisuudessaan omistusasumisesta aiheutuvat positiiviset ulkoisvaikutukset näyttävät olevan minimaalisia. Samaan aikaan vuokra-asujat ovat muuttoalttiimpia ja tekevät lyhyempiä työmatkoja, mikä edistää työmarkkinoiden joustavuutta (Blanchflower ja Oswald 2013). Tutkimusten perusteella vuokra-asumisen keskittymiseen sinänsä ei voida osoittaa liittyvän merkittäviä negatiivisia ulkoisvaikutuksia. ...
Tutkimuksessa tarkasteltiin, mikä on pienten asuntojen osuus asuntotuotannossa ja mikä vaikutus niiden lisääntymisellä on asuinalueiden viihtyvyyteen ja eriytymiseen. Tutkimuksessa kartoitettiin rakentamisen kansallista tilastoaineistoa ja analysoitiin tiettyjä kaupunkien kohdealueita sekä laadittiin katsaus alan kansainvälisestä tutkimuskirjallisuudesta. Tutkimuksessa haastateltiin myös sidosryhmiä ja koottiin työpajassa toimijoiden näkemyksiä sekä suoritettiin kysely isännöitsijöille.
Tutkimuskirjallisuudessa ei ole juurikaan käsitelty pieniä asuntoja ja niiden vaikutuksia. Ilmiötä sivuava tutkimuskirjallisuuden avulla voidaan todeta, että pienasuntojen laaja-alainen keskittyminen tietyille asuinalueille ei ole taloudellisten tulemien, kuten aikuisiän tulojen tai työmarkkinamenestyksen, kannalta toivottavaa.
Tilastollinen tarkastelu osoitti, että pienten asuntojen lukumäärä on noussut erityisesti suurissa kaupungeissa. Ilmiötä ovat vauhdittaneet asuntokuntien koon pieneneminen, kaupungistuminen ja asumismenojen kohoaminen. Näistä tekijöistä johtunut kasvava kysyntä, asuntomarkkinoiden finanssoituminen ja sijoittajien aktiivisuus ovat vauhdittaneet pienten asuntojen rakentamista viime aikoina. Kaupungistumisen odotetaan jatkuvan tulevaisuudessa, joten pienten asuntojen kysynnän nähdään pysyvän voimakkaana kasvukeskuksissa jatkossakin.
Haastatteluissa asuntopolitiikan asiantuntijat tunnistivat riskejä joidenkin alueiden asuntokannan yksipuolistumisessa. Sen sijaan esimerkiksi isännöitsijät näkivät pienten asuntojen lisääntymisen riskit melko pieninä. Keskeisenä havaintona oli, että kaikki osapuolet tunnistavat pienten asuntojen ilmiön, mutta käsitykset sen laajuudesta sekä mielipiteet ilmiön hyödyllisyydestä tai vahingollisuudesta erosivat. Myös mahdollisuudet vaikuttaa ilmiöön eri tyyppisin politiikkatoimin koettiin rajallisiksi.
... 4 In general, the relationship between homeownership and labor market mobility or unemployment has been discussed in many other places, and an incomplete list might include Oswald (1996); Blanchflower and Oswald (2013), Coulson and Fisher (2002), Güler andTaskın (2011), Battu et al. (2008) or Halket and Vasudev (2014). Shapiro (2002) respectively discuss the benefits and distortions generated by this policy, and Poterba and Sinai (2008) provide an estimate of the financial benefit to owners from it. ...
This thesis is about the role of housing as a consumption good and a risky asset, and how it interacts with other choices like consumption, default, and migration over the lifecycle. In the first chapter the focus is on a quasi natural experiment in the State of Nevada, which abolished deficiency judgments for purchase mortgage loans made after October 2009. We test the effect of the law change on mortgage supply and demand, as well as on mortgage default. We find strong evidence that lenders tightened their lending standards. Households, by contrast, neither increased their mortgage applications, nor do they appear to have changed mortgage default behaviour. The second chapter develops the theme of mortgage default and consumption insurance in a more structural way. We estimate a model of consumption, housing demand and labor supply when individuals may file for bankruptcy and default on their mortgage over the lifecycle. Bankruptcy and mortgage default comply with the basic institutional framework in the US, allowing for the choice between chapter 7 or chapter 13 bankruptcy. The final chapter estimates a lifecycle model of consumption, housing choice and migration in the presence of aggregate and regional shocks, using the Survey of Income and Program Participation (SIPP). Using the model I estimate the value of the migration option and the welfare impact of policies that may restrict mobility. The option to move is equivalent to 4.4% of lifetime consumption. I also find that, were the mortgage interest-rate deduction to be eliminated, the aggregate migration rate would increase only marginally by 0.1%. In a new steady state the elimination of the deduction is equivalent to an increase of 2.4% of lifecycle consumption.
... These theoretical considerations are confirmed by empirical studies of Cuerpo, Pontuch, and Kalantaryan (2014) and Czerniak and Rubaszek (2018), who present evidence that a developed rental market diminish the response of the housing sector to economic and demographic disturbances. On top of that, it can be added that a number of studies show that well-functioning private rental sector can influence residential mobility (Bloze, 2009;Caldera-Sanchez & Andrews, 2011), limit long-term unemployment (Blanchflower & Oswald, 2013), enhance human capital formation (Schulz, Wersing, & Werwatz, 2014), but also can be detrimental for the formation of social capital (DiPasquale & Glaeser, 1999). ...
The share of the private rental housing market in Central and Eastern European countries is low. With a survey data from Poland, I show that strong tenure preferences of households toward owning can be attributed to both economic and psychological factors. Building on these findings, I develop a life cycle model and I conduct counterfactual simulations to evaluate how changes in the structure of the rental market affect its size. I show that in the alternative scenario, which assumes (i) a change in the quality of rental services, (ii) lowering rental prices and (iii) diminishing fiscal incentives to own, the size of the private rental market is significantly higher, which leads to welfare gains for poor households.
... However, Oswald (2009) suggests that since homeowners are relatively less mobile across geographic locations than renters, regional homeownership rates are positively correlated with the level of regional unemployment rates. This is often referred to in the literature as the Oswald hypothesis with Blanchflower and Oswald (2013) offering a discussion on the US states. One might therefore reason that increased homeownership per se may have a negative impact on employment-matching, or a positive impact on the pairwise Beveridge intercept. ...
This paper offers new insights into Beveridge curve analysis by modelling the unemployment–vacancy rate relationship at state‐level within a pairwise environment in which the unemployment rate in one state is inversely related to the vacancy rate in another. We find that Beveridge curve shifting, or matching efficiency, is driven by factors that include distance between states, the labour force participation rate, homeownership and the relative affordability of housing between states. A pairwise recursive analysis points to a decrease in matching efficiency in the period that followed the Great Recession.
... One limitation of these three studies, however, is that they focus on direct effects on homeowners and renters do not address the possibility of externalities as suggested by Blanchflower and Oswald (2013) and recently studied by Laamanen (2017). Nevertheless, these recent studies using housing privatization tend to add weight on the part of the empirical literature suggesting that homeownership, and policies propping it up, such as housing privatization, do not have direct detrimental effects on the labor markets. ...
We study the effects of homeownership on labor force participation and unemployment. We exploit housing privatization and restitution after the fall of communism as a source exogenous assignment of homeowner/renter status, using a unique dataset from the city of Brno, Czech Republic. We do not find any evidence of homeownership hindering labor force participation. In fact, our estimates suggest that homeownership reduces unemployment by four to six percentage points. Homeownership appears to decrease the risk of unemployment by about one third to one half, relative to renters. The estimated effects on labor force participation are systematically around zero.
... Amior and Halket (2014) study the insurance role of homeownership. Homeownership can however also have detrimental effects on the labor market as studied by Blanchflower and Oswald (2013) and Laamanen (2017). ...
The U.S. government guarantees a majority of residential mortgages, which is often justified as a means to promote homeownership. In this paper we use property-level data to estimate the effect of government mortgage guarantees on homeownership, by exploiting variation of the conforming loan limits (CLLs) along county borders. We find substantial effects on government guarantees, but find no robust effect on homeownership. This finding suggests that government guarantees could be considerably reduced with modest effects on homeownership, which is relevant for housing finance reform plans that propose to reduce the government’s involvement in the mortgage market by reducing the CLLs.
... Por ello, comenzamos estimando de nuevo la especificación 3 pero excluyendo la tasa de desempleo regional. Seguidamente, teniendo en cuenta que Blanchflower y Oswald (2013) postulan que el efecto de la tasa de vivienda en propiedad puede llevar un período de retardo largo, incluso de entre 4 y 5 años, estimamos de nuevo la especificación 3 utilizando ahora cualquier retardo hasta 5 años de la tasa de vivienda en propiedad regional, en lugar de sus valores contemporáneos 2 . En todos los casos, los resultados permanecen consistentes con los obtenidos en el cuadro 3. También, si realizamos el mismo ejercicio con las especificaciones 2 y 4, llegamos a resultados similares a los recogidos en el cuadro 3. ...
... At first glance the recent Survey of Adult Skills seems to underline the same twenty years later (OECD, 2013, 118-125). 76 See also Blanchflower and Oswald (2013). 77 Charles andGuryan (2007, 2008) explain one quarter of the racial wage gap for blacks in the USA from employer prejudice. ...
Labour-Market Institutions and the Dispersion of Wage Earnings * Considering the contribution of the distribution of individual wages and earnings to that of household incomes we find two separate literatures that should be brought together, and bring 'new institutions' into play. Growing female employment, rising dual-earnership and part-time employment underline its relevance. We discuss the measurement of wage inequality, data sources, and stylized facts of wage dispersion for rich countries. The literature explaining the dispersion of wage rates and the role of institutions is evaluated, from the early 1980s to the recent literature on job polarization and tasks as well as on the minimum wage. Distinguishing between supply-and-demand approaches and institutional ones, we find the former challenged by the empirical measurement of technological change and a risk of ad hoc additions, without realizing their institutional preconditions. The institutional approach faces an abundance of institutions without a clear conceptual delineation of institutions and their interactions. Empirical crosscountry analysis of the correlation between institutional measures and wage inequality incorporates unemployment and working hours dynamics, discussing the problems of matching individuals to their relevant institutional framework. Minimum wage legislation and active labour market policies come out negatively correlated to earnings inequality in US and EU countries. JEL Classification: D02, D13, D31, J22, J31, J51, J52
We investigate the impact of neighborhood homeownership rates on students’ achievement in public schools in the U.S. state of Georgia. Homeownership and students’ achievement are likely to be endogenously determined at the neighborhood level. We correct for this endogeneity concern using population growth as the instrument for the neighborhood homeownership rate. The findings suggest that a 1-percentage-point increase in homeownership rate at the census tract level increased the percentage of proficient learners and above in third-grade reading by 0.24 percentage points, and the effects are stronger—economically and statistically—in estimates that correct for the endogeneity of neighborhood homeownership rates. Further, the effects of homeownership are much larger in the sample of low-income, less affluent, or more black or African American-dominated neighborhoods, compared with the overall sample.
The nexus between the residential sector and environmental quality is reciprocal and complex. The residential sector generates environmental impacts via land and materials use, energy consumption and the transport activity it engenders. Environmentally motivated policies on land-use, construction and energy efficiency, and transport seek to alleviate these impacts by incorporating the cost of environmental externalities into house prices. As a result, such policies often have negative impacts on affordability. Housing policies can also have environmental implications insofar as they affect the environmental footprint of residential development. The impacts of environmental policies on housing markets, and vice versa, depend on policy and the characteristics of the urban areas where they are implemented. Sustainability in the housing market can be promoted according to social welfare approach that accounts for housing affordability, as well as the environmental and economic impacts of policies.
Using detailed data for U.S. homeowners, we document a negative, nonlinear relation between the loan-to-value ratio (LTV) of homeowners’ primary residence and their labor income. Consistent with high LTV individuals experiencing constrained mobility, we find stronger effects among subprime, liquidity- constrained individuals and those living in regions with limited alternative local employment opportunities and strict noncompete law enforcement. Though high LTV individuals are less likely to move across MSAs, they are more likely to change jobs without changing their residence. We find no effects among similar neighboring renters employed at the same firm and with a similar job tenure.
State public college tuition and fees have risen sharply in recent decades. In this paper we investigate how young Americans absorbed this increase and how it affected their post-schooling financial behaviors. Exploiting state-cohort variation in tuition increases, we find that recent student cohorts accommodated tuition shocks not by forgoing college education, but instead by amassing more debt. The rise in tuition and student debt in turn contributed to a sharp decline in homeownership which was concentrated in suburban and urban areas, especially in the US Northeast and West, and in higher-priced housing markets and locations in which younger adults make up a bigger share of the residential population. Thus tuition-hiking states can expect to see a response not through a decline in workforce skills, but through weaker future spending and wealth accumulation among young consumers.
In diesem Kapitel wird zunächst die Rolle des selbstgenutzten Wohneigentums im Vermögens-Portfolio der privaten Haushalte untersucht sowie der Frage nachgegangen, wie sich die Portfoliostruktur in Zeiten niedriger Zinsen und steigender Immobilienpreise verändert hat. Haben die meisten Wohneigentümer ihr Wohneigentum am Markt erworben, oder geht die Wohneigentumsverteilung vor allem auf Schenkungen und Erbschaften zurück? Diese Fragen rund um die Art des Wohneigentumserwerbs sowie die Bedeutung von vererbtem Wohnimmobilien an allen Erbschaften und Schenkungen stehen ebenso im Fokus des Kapitels. Die Ergebnisse der Analyse zeigen, dass im letzten Jahrzehnt kaum strukturelle Verlagerungen zu mehr Wohnimmobilienvermögen zu beobachten sind. Im internationalen Vergleich ist die Wohneigentumsquote in Deutschland eher gering. Rund ein Viertel der Wohneigentümer haben ihre Immobilien geerbt oder geschenkt bekommen. Gleichzeitig machten vererbte Wohnimmobilien beinahe die Hälfte des jahresdurchschnittlichen Wertes aller Erbschaften und Schenkungen im Zeitraum zwischen 1991 und 2014 aus. Der Effekt von Erbschaften auf die Nettovermögensverteilung ist insgesamt eher ungleichheitsreduzierend, was auch für Wohnimmobilien gilt, da sich viele Erben ohne ihre Erbschaft im unteren Bereich der Vermögensverteilung einordnen würden. Gleichwohl ist zu beachten, dass die verfügbaren Daten aufgrund ihrer jeweiligen Schwächen bei der Vermögenserfassung bisher nur einen Teil der Wirklichkeit abbilden können.
Research background: Residential mobility affects the spatial structure of cities and urban development. Longer-distance migration has many additional implications: it affects the demographic situation of a sending area as well as its growth prospects. The literature on interregional and especially international migration regards residential satisfaction as being of at least secondary importance. More attention to this concept is given in research on intra-urban migration and suburbanisation. In a seminal paper of Speare (1974), residential satisfaction was found to be the best predictor of the willingness to move. However, determinants of mobility are country-specific.
Purpose of the article: Answering the following research questions: 1) What is the scale and selectivity of the intention to move among city residents? 2) Does residential satisfaction explain variation in migration intentions?
Methods: The data are derived from the PAPI survey on life quality in Lublin, Poland (sample: 1101 residents). We build ordered logit models explaining residents’ declarations regarding different types of migration (intra-urban migration, suburbanisation, interregional and international migration) with various proxies of residential satisfaction, as well as financial situation and demographic attributes.
Findings & Value added: The propensity to migrate was declared by approx. 15–30% of respondents, depending on the type of migration, which indicates relatively low mobility as against EU countries. We confirm that the intention to move is highly selective. The estimated ordered logit models explaining the intention to move prove that satisfaction with housing and neighbourhood characteristics along with life-stage characteristics are relevant predictors of intention to move both within and outside the region. We disregard the opinion that unemployment and adverse financial situation are key drivers of mobility in contemporary Poland. In a more international context, we provide evidence on how long- and short-distance migration are different in nature and discuss some policy implications regarding countering depopulation in peripheral areas.
We investigate how variation in initial conditions, which assign individuals into advantaged or disadvantaged positions, alters behavior. We illustrate the problem within a labor market context and consider the impact of accumulated debt on wage selectivity. Using a two-period model, we show that debt exerts a non-monotonic effect on wage selectivity, with agents assigned low and high levels of debt being significantly more likely to reject an initial wage offer than agents with moderate debt. This prediction is supported by our experiment, which finds a statistically significant dip in wage selectivity for subjects assigned moderate levels of debt.
La mobilité est devenue un enjeu important et un objectif majeur des politiques publiques en faveur des ménages pauvres. La recherche a largement montré que les populations les plus éloignées de l’emploi l’étaient également d’un point de vue purement spatial. Souvent éloignées des zones d’emploi, connaissant une plus grande précarité financière, les plus pauvres ont davantage de difficultés à trouver un emploi, se rendre sur leur lieu de travail, accéder aux services publics ou aux aménités locales. Une partie de la littérature s’est attachée à expliquer cette ségrégation spatiale ; une autre à montrer ses conséquences négatives et les cercles vicieux dans lesquels elle enfermait la pauvreté ; une troisième à analyser les moyens de la réduire en désenclavant ces territoires. Cette thèse vise à apporter un éclairage spécifique sur les aides à la mobilité apportées aux ménages défavorisés. Ces aides se sont développées en France essentiellement à partir des années 1990. Bien qu’elles prennent des formes diverses, elles poursuivent le même objectif : favoriser la mobilité spatiale des ménages pauvres, par un accès facilité à un moyen de transport individuel ou collectif. Leur mise en œuvre est essentiellement locale. Il existe peu de travaux qui ont cherché à mesurer les conséquences du développement de ces aides. Cette thèse vise à apporter un éclairage particulier sur ce point. Dans un premier temps, nous proposons une étude du développement de ces aides depuis les années 1980 et surtout 1990, à partir d’une impulsion nationale, mais avec des applications locales très variées. Nous cherchons à mesurer dans quelle mesure ces aides ont pu interagir aussi bien avec le système national d’aide sociale qu’avec les autres aides locales apportées par les différentes collectivités. Nous montrons que ces aides ont pu contribuer à renforcer des effets de seuil et des trappes à pauvreté qui étaient propres au mécanisme du RMI et qui ont amené à son remplacement par le RSA. Nous montrons également que cette réforme majeure de l’aide sociale nationale a impacté en retour les aides locales et spécifiquement les aides au transport. Le second chapitre s’intéresse à un aspect ignoré dans le chapitre 1, celui du non recours aux aides sociales. L’originalité de notre travail est de nous pencher sur une aide spécifique au transport (le Forfait Gratuité Transport en Île de France) et d’étudier le non recours à cette aide en intégrant une double dimension spatiale : il s’agit tout d’abord de la distance entre les bénéficiaires et le réseau de transport en commun, susceptible d’expliquer un moindre recours. Il s’agit ensuite de l’influence de l’environnement géographique et notamment des effets de diffusion sur la connaissance et la demande d’une telle aide. Les deux derniers chapitres proposent des évaluations expérimentales d’aides à la mobilité orientées vers de jeunes décrocheurs ayant quitté le système scolaire et n’étant ni en formation, ni en emploi. Pour ces jeunes, la mobilité est centrale pour espérer une insertion professionnelle et sociale. Nous évaluons d’abord seize actions différentes proposées par différents acteurs pour favoriser la mobilité et montrons un effet positif bien que contrasté ; les aides peu intenses ont moins d’effet que les aides plus intenses. Ce constat est largement confirmé dans le quatrième chapitre qui évalue l’expérimentation du Service Militaire Volontaire. Les jeunes sélectionnés reçoivent une formation générale et professionnelle ainsi qu’une préparation au permis de conduire. Ce dispositif extrêmement intense où les jeunes sont encadrés par des militaires donne des résultats impressionnants en termes d’insertion professionnelle et surtout d’obtention du permis de conduire. Pour que des politiques d’aide à la mobilité soient efficaces, tant sur la mobilité que sur l’insertion, nous pouvons conclure qu’il vaut mieux concentrer les moyens sur les plus fragiles
The proportion of New Zealand households living in owner-occupied dwellings has declined steadily since the early 1990s. The unemployment rate declined steadily as well, except for upward shifts due to the late 1990s Asian Financial Crisis and the Global Financial Crisis a decade later. Research initiated by Andrew Oswald in the 1990s posits that declining homeownership and declining unemployment are linked and that the causality runs from high homeownership leading to high unemployment. The international empirical evidence for this hypothesis is rather mixed. In this paper, we revisit the issue with New Zealand census data for commuting-defined labour market areas from 1986 until 2013. Allowing for spatial spillovers in our data, we apply a general nesting spatial-econometric model. We also consider the potentially different impacts of freehold and mortgaged homeownership. Generally, the evidence that a declining homeownership rate contributes to a lower unemployment rate is statistically fragile. When statistically significant, an increase of 1% in freehold ownership appears to increase a labour market area’s unemployment rate by between 0.07 and 0.2% points. The effect is relatively stronger in those labour market areas where freehold ownership is still relatively low.
Kazakhstan’s cities are hubs of economic opportunity and prosperity. But despite the Government’s ambitious targets, the pace of urbanization remains slow. This study focuses on two key constraints: (i) the very high cost-of-living in Kazakhstan’s cities, and (ii) the near absence of a rental housing market outside of the capital, Nur-Sultan. The findings show that the two urban centres of Almaty and Nur-Sultan are 190% and 240% more expensive to live in than the national average. Housing is the primary driver of the disparity: after adjusting for inflation, housing costs tripled in Nur-Sultan and quadrupled in Almaty between 2001 and 2015. As a result, housing costs for the local population in these areas are more unaffordable than famously exclusive cities such as San Francisco and Vancouver. Demand elasticities imply that rural and low-income households are especially unlikely to relocate to high-priced areas where employment prospects are better and average incomes are higher. Regional convergence in wage rates remains slow but appears to be proceeding most quickly in Nur-Sultan, where rental housing is most prevalent. The findings suggest that high rates of home ownership and the high cost-of-living in cities lead to exclusion of lower-income households and restrains economic growth.
Highlights
• Urbanization in Kazakhstan is proceeding very slowly, despite ambitious government targets.
• The high cost-of-living in the urban areas of Nur-Sultan and Almaty deters many potential domestic migrants.
• This is driven almost entirely by housing costs: housing in high-demand cities is seriously unaffordable for most people, even among those already living in cities.
• High home ownership rates and an abnormally small rental market further reduce domestic mobility.
The authors produce estimates for a new and better rate of underemployment for 25 countries using the European Labor Force Survey that is based on workers’ reports of their preferred hours at the going wage. Both voluntary and involuntary part-time workers report they want more hours. Full-time workers who say they want to change their hours, mostly say they want to reduce them. When the Great Recession hit, the number of hours of those who said they wanted more hours increased, and the number of hours of those who said they wanted fewer hours decreased. The percentage of workers in both categories remains elevated. The authors provide evidence for the United Kingdom and the United States as well as from an international sample that underemployment lowers pay in the years after the Great Recession, but the unemployment rate does not. They also find evidence for the United States that decreases in the home ownership rate have helped to keep wage pressure in check. Underemployment replaces unemployment as the main influence on wages in the years since the Great Recession.
Deutschland ist, ähnlich wie seine deutschsprachigen Nachbarländer, ein Land der Mieterinnen und Mieter. Mit 51,4 Prozent ist die personenbasierte Wohneigentumsquote im Jahr 2017 im europäischen Vergleich besonders niedrig (Eurostat, 2019). In Österreich ist sie mit 55 Prozent unwesentlich höher (2017), in der Schweiz mit 42,5 Prozent niedriger (2016) (ebd.). Für diese Länderunterschiede sind in der Literatur verschiedene Gründe angeführt worden, darunter auch die unterschiedlich starke politische Förderung von Wohneigentum (Atterhög, 2005). Hierbei ist die steuerliche Behandlung von Wohneigentum besonders bedeutend, da sie die Entscheidung von Haushalten (mieten oder kaufen) und damit die Neutralität der Wohnformen maßgeblich beeinflussen kann. Das Ziel dieses Beitrags ist es, die Neutralität der steuerlichen Regulierung in den deutschsprachigen Ländern zu messen, um einerseits methodisch zu testen, ob diese Regulierung in Indexdaten abgebildet werden kann, und um andererseits eine Datengrundlage für weitere historisch-vergleichende Untersuchungen zu schaffen. Denn die Idee, dass die eigentümerfreundliche Steuergesetzgebung auf die Wohneigentumsquote wirkt, wird in gängigen, ad-hoc und Querschnittserklärungen zwar häufiger angeführt, aber in der international vergleichenden Forschung sind bisher Wohnungspolitikindikatoren nicht verbreitet und damit Wirkungsanalysen politischer Instrumente selten. Dieser Beitrag möchte daher mit der Kodierung von Indizes der wohnungsspezifischen Steuergesetzgebung in vier relevanten Feldern in den drei Ländern einen ersten methodischen und empirischen Beitrag leisten.
Our empirical study stems from previous research on the inter-relations between residential status and microeconomic labor market outcomes. It focuses on employees and assesses the a priori ambiguous effect of homeownership on job-match quality. We use the French data set of the 1995–2001 European Community Household Panel to build a subjective measure of job downgrading. We estimate a recursive trivariate probit with partial observability that simultaneously models the residential status choice, its impact on the probability of being downgraded, and the selection into employment. Taking into account, the double selection process, into employment and into homeownership, and controlling unobserved individual heterogeneity, we find that private renters have between 30% and 40% higher probability of subjective downgrading than homeowners. Mortgage constraints increase the downgrading probability, but their effect is of a limited scope (around +2% percentage points for mortgagers compared with outright owners). We show that these results are robust to various specifications and instruments choice. Consequently, homeownership seems not to be associated to some harmful effects on the job-match quality. Our conclusions are consistent with recent microeconometric studies which call into question Oswald’s hypothesis.
This paper argues that the housing affordability and wealth inequality crises facing advanced economies are driven by the emergence of a feedback cycle between finance and landed property. The cycle has been created by the increasing policy preference for private home ownership coupled with the liberalization of bank credit and accompanying financial innovation. Under such conditions, landed property becomes both the most attractive form of collateral for the banking system and the most desirable form of financial asset for households and investors. The housing–finance cycle emerged in Anglo-Saxon economies in the 1980s but has since spread to most advanced economies. Demand-side reforms, more than the supply-side reforms that dominate policy discussion, are required to break this cycle. Two reforms are discussed: (a) structural and institutional reforms to banking systems, including central banks; and (b) land policy reforms targeted at reducing the potential for rent extraction and speculative profits from property ownership.
Many people have a strong preference to own the house or apartment they are living in. Among other factors, homeownership is expected to affect the subjective well-being of individuals. Our paper analyzes the impact of homeownership on subjective well-being in Switzerland. Based on the data from the Swiss Houshehold Panel (SHP) over the time period from 2000 to 2016, we use a generalized ordered logit model to explain life satisfaction by a set of relevant factors including homeownership. Our results, which have been tested for robustness within several specifications, provide strong empirical evidence for the fact that homeowners are happier than tenants. This effect seems to be robust over the years considered as well as for different specifications of our model. In order to control for a potential reverse causality effect, we separately analyze the subsample of households that had a change in the homeownership but no changes with respect to other characteristics. The generated odds ratios confirm the positive impact of homeownership on people’s happiness and the absence of a reverse causality effect.
Functional public sector is one of main pre-conditions for sustainable development and economic growth. This paper evaluated the performance of the Slovak tax administration and the Slovak tax system as the whole, with focus on three possible performance lines - calculation of administrative costs of taxation (input – output measurement), calculation of compliance costs of taxation (measuring “administrative” burden caused by taxation) and the general opinion of experts about the system. Its findings are rather negative and highlight major deficiencies that should be addressed by future public policies and reforms.
Demographic and institutional elements, as important drivers of the housing market, should not be neglected because it is not only financial and monetary elements that matter in the case of the housing market. In this context, one relationship, which still remains unclear, is the relationship between the housing and the labour markets. Some research has been undertaken to support the hypothesis that high rates of homeownership lead to high unemployment via increases in the reservation wage. However, further research is needed to address the possible implications of the institutional settings of the labour market in the dynamics of the housing market. The aim of this paper is to bring some light on the link between both markets. In particular, this contribution explains how the housing cycle could be “amplified” via a new channel, that is, economic precariousness, which is closely related to job insecurity. Subsequently, we provide evidence in the case of five developed economies, Ireland, the Netherlands, Spain, the United Kingdom, and the United States, over the period 1985–2013.
We investigate unemployment due to mismatch in the United States over the past three and a half decades. We propose an accounting framework that allows us to estimate the contribution of each of the frictions that generated labor market mismatch. Barriers to job mobility account for the largest part of mismatch unemployment, with a smaller role for barriers to worker mobility. We find little contribution of wage-setting frictions to mismatch.
This paper examines the impact of housing tenure choice on unemployment duration in Belgium using EU-SILC micro data. We contribute to the literature in distinguishing homeowners with mortgage payments and outright homeowners. Accounting for tenure endogeneity and unobserved heterogeneity, we find that homeowners with a mortgage exit unemployment first, while outright owners stay unemployed the longest. Tenants take an intermediate position. Our results emphasize the key role of housing costs in the link between housing tenure and labour market outcomes. Considered together with the results of recent macroeconomic research on housing and employment in Belgium, this paper provides indirect evidence for significant negative effects of homeownership on the labour market and the economy beyond the owners themselves.
The effect of the Great Recession on the U.S. labor market will likely persist even after economic output has recovered. Although the recession did not greatly change the relative probabilities of job loss for different types of workers, the long-run impact will vary by worker characteristics. Workers who lost long-term jobs during the Great Recession are at increased risk of future job loss due to the loss of protection afforded by long-term job tenure, and older displaced workers are at a relatively high risk of prolonged spells of unemployment and premature retirement. The recent increase in the job vacancy rate with relatively little change in the unemployment rate suggests a decrease in the efficiency of job matching and an increase in the NAIRU. However, this phenomenon may pass once aggregate demand has increased enough to bring vacancy rates back within their normal range and extended unemployment insurance programs have expired.
In a series of papers Andrew Oswald has suggested that since home owners are relatively less mobile across geographic locations than renters, regional home ownership rates are positively correlated with regional unemployment rates. This paper examines this hypothesis at the individual level. Search theory suggests that when a subset of the population is less mobile than others, this less mobile group (that is, owners) will have lower probability of employment, longer spells of unemployment and lower wages than more mobile renters. These hypotheses on inferior labour market outcomes for owners were tested using US Current Population Survey data as well as data from the Panel Survey of Income Dynamics. The empirical model suggests that these hypotheses are not supported by any of the tests. Home owners, conditionally or unconditionally, have better labour market outcomes than renters.
U.S. policymakers are concerned that negative home equity arising from the severe housing market decline may be constraining geographic mobility and consequently serving as a factor in the nation's persistently high unemployment rate. Indeed, the widespread drop in house prices since 2007 has increased the share of homeowners who are underwater on their mortgages. At the same time, migration across states and among homeowners has fallen sharply. Using a logistic regression framework to analyze data from the Internal Revenue Service on state-to-state migration between 2006 and 2009, the authors discover evidence that "house lock" decreases mobility but find it has a negligible impact on the national unemployment rate. A one-standard deviation increase in the share of underwater nonprime households in the origin state reduces the outflow of migrants from the origin to the destination state by 2.9 percent. When aggregated across the United States, this decrease in mobility reduces the national state-to-state migration rate by 0.05 percentage points, resulting in roughly 110,000 to 150,000 fewer individuals migrating across state lines in any given year. Assuming that all of these discouraged migrants were job-seekers who were previously unemployed before relocating and then found a job in their new state would reduce the nation's unemployment rate by at most one-tenth of a percentage point in a given year. The cumulative effect over this period would yield an unemployment rate of 9.0 percent versus 9.3 percent in 2009. Recognizing that not all state-to-state migrants are job-seekers, not all job-seekers were previously unemployed, and not all previously unemployed job-seekers will successfully find work in their new location yields an unemployment rate that is virtually unchanged from the actual one that prevailed from 2006 to 2009.
Sixteen recent longitudinal studies are examined for evidence relevant to the claim that a change to one's employment status affects one's mental health. Although there were limitations to the set of studies examined, most of the studies supported this claimed relationship. Examination was then made of the size of this effect. In carrying out this examination, the set of study results were divided into two categories: (a) those addressing the question of the extent to which gaining employment impacts on mental well-being; (b) those addressing the question of the extent to which employment loss impacts on mental health. The meta-analyses indicated that there was a weighted effect size of .54 for the first question, and a smaller weighted effect size (.36) for the latter question.
A large literature in macroeconomics assumes a social objective function, W(p, U), where inflation, p, and unemployment, U, are bads. This paper provides some of the first formal evidence for such an approach. It uses data on the reported well-being levels of approximately one quarter of a million randomly sampled Europeans and Americans from the 1970's to the 1990's. After controlling for personal characteristics, year dummies and country fixed effects, we find that the data trace out a W(p, U) function. It is approximately a linearly additive "misery index". The paper calculates the implied dollar value of a low inflation rate. It also examines the structure of happiness equations across countries and time.
A huge research literature, across the behavioral and social sciences, uses information on individuals’ subjective well-being.
These are responses to questions—asked by survey interviewers or medical personnel—such as, “How happy do you feel on a scale
from 1 to 4?” Yet there is little scientific evidence that such data are meaningful. This study examines a 2005–2008 Behavioral
Risk Factor Surveillance System random sample of 1.3 million U.S. citizens. Life satisfaction in each U.S. state is measured.
Across America, people’s answers trace out the same pattern of quality of life as previously estimated, from solely nonsubjective
data, in one branch of economics (so-called “compensating differentials” neoclassical theory, originally from Adam Smith).
There is a state-by-state match (r = 0.6, P < 0.001) between subjective and objective well-being. This result has some potential to help to unify disciplines.
We study the interactions among geographical mobility, unemployment, and home-ownership in an economy with heterogeneous locations,
endogenous construction, and search frictions in the markets for both labour and housing. The decision of home-owners to accept
job offers from other cities depends on how quickly they can sell their houses (i.e. the houses' liquidity), which in turn depends on local labour market conditions. Consequently, home-owners accept job offers from other cities
at a lower rate than do renters, generating a link between home-ownership and unemployment both at the city level and in the
aggregate. When calibrated to match aggregate U.S. statistics on mobility, housing, and labour flows, the model predicts that
the effect of home-ownership on aggregate unemployment is small. When unemployment is high, however, changes in the rate of
home-ownership can have economically significant effects.
In this paper we develop an equilibrium search and matching model where two-person families as well as singles participate in the labor market. We show that equilibrium entails wage dispersion among equally productive risk-averse workers. Marital status as well as spousal labor market status matters for wage outcomes. In general, employed members of two-person families receive higher wages than employed singles. The model is applied to a welfare analysis of alternative unemployment insurance systems, recognizing the role of spousal employment as a partial substitute for public insurance. The optimal system involves benefit differentiation based on marital status as well as spousal labor market status.
The aim of this study is to explore the dynamics of regional labour markets in terms of migration flows. In particular, the study explores the impact of labour markets and housing markets on migration. The internal and the external re-organisations of regional labour markets are shown to be related. An increase in internal turnover within establishments in regional labour markets is found to increase net-migration. This effect arises mainly from a reduction in out-migration. Housing markets constitute binding constraints for migration flows through housing prices and the share of owner-occupancy housing. The results imply that an increase in regional housing prices and a large share of owner-occupancy housing discourages net-migration to a region by reducing inmigration. The out-migration rate remains largely unaffected by housing markets.
In the United States, religious attendance rises sharply with education across individuals, but religious attendance declines sharply with education across denominations. This puzzle is explained if education both increases the returns to social connection and reduces the extent of religious belief, and if beliefs are closely linked to denominations. The positive effect of education on social connection is the result of both treatment and selection: schooling creates social skills and may increase people’s utility from engaging in other social activities such as church attendance. The negative effect of education on religious belief occurs because secular education emphasizes secular beliefs that are at odds with many traditional religious views.
We show that macroeconomic movements have strong effects on the happiness of nations. First, we find that there are clear microeconomic patterns in the psychological well-being levels of a quarter of a million randomly sampled Europeans and Americans from the 1970s to the 1990s. Happiness equations are monotonically increasing in income, and have similar structure in different countries. Second, movements in reported well-being are correlated with changes in macroeconomic variables such as gross domestic product. This holds true after controlling for the personal characteristics of respondents, country fixed effects, year dummies, and country-specific time trends. Third, the paper establishes that recessions create psychic losses that extend beyond the fall in GDP and rise in the number of people unemployed. These losses are large. Fourth, the welfare state appears to be a compensating force: higher unemployment benefits are associated with higher national well-being.
Perhaps the most common finding relating housing to the labour market is that high home-ownership rates are associated with higher unemployment. In contrast, recent micro-evidence suggests that home-owners have relatively favourable labour market outcomes. We explore the effect of home-ownership on unemployment exploiting a rental housing market deregulation reform which created exogenous variation in home-ownership across regions, allowing us to avoid the endogeneity problem in earlier studies. While home-owners are less likely to experience unemployment, an increase in the home-ownership rate causes unemployment to rise. Externalities arising from consumption reductions and increased job competition may explain the conflicting evidence.
In this paper, we scrutinise Oswald's evidence that home-ownership and unemployment are correlated across the US states. In order to abstract from state fixed-effects in levels, we analyse the cross-sectional variation in changes in home-ownership and unemployment rates between 1970 and 1990. After duplicating (nearly) Oswald's result, we illustrate the importance of weighting the state observations by the fraction of total US households in 1970 that resided in the respective states and of abstracting from the ageing of the population between 1970 and 1990: this causes Oswald's correlation to to disappear. Secondly, we estimate the relationship for six different age-classes and for household heads and total population. We find that the relationship is non-existent for both young households and old households, but exists for middle-aged households. Young households have accumulated little wealth and have had less time to become attached to the geographical area than middle-aged households and thus are more likely to respond to unemployment by relocating. Older households' employment cannot be greatly affected by home-ownership because their members are largely not in the labour force. Unemployment rates of household heads are affected less by tenure than those of the population as a whole.
A recent decline in geographic mobility in the United States may have been caused in part by falling house prices, through the "lock in" effects of financial constraints faced by households whose housing debt exceeds the market value of their home. I analyze the relationship between such "house lock" and the elevated levels and persistence of unemployment during the recent recession and its aftermath, using data that covers the period through the end of 2011. Because house lock will extend job search in the local labor market for homeowners whose home value has declined, I focus on differences in unemployment duration between homeowners and renters across geographic areas differentiated by the severity of the decline in home prices. The empirical analyses rely on microdata from the monthly Current Population Survey (CPS) files and an econometric method that enables the estimation of individual and aggregate covariate effects on completed unemployment durations in "synthetic cohort" (pseudo-panel) data. The estimates indicate the absence of a meaningful house lock effect on unemployment duration.
The past thirty years have seen a dramatic decrease in the rate of income convergence across U.S. states. This decline coincides with a similarly substantial decrease in population flows to wealthy states. We develop a model where labor mobility plays a central role in convergence and can quantitatively account for its disappearance. We then link this decline in directional migration to a large increase in housing prices and housing regulation in high-income areas. The model predicts that these housing market changes generate (1) a divergence in the skill-specific economic returns to living in rich places, (2) a decline in low-skilled migration to rich places and continued low-skilled migration to places with high income net of housing costs, (3) a decline in the rate of human capital convergence and (4) continued income convergence among places with unconstrained housing supply. Using Census data, we find support for the first three hypotheses. To test the fourth hypothesis, we develop a new state-level panel measure of housing supply regulations. Using this measure as an instrument for housing prices, we document the central role of housing prices and building restrictions in the end of income convergence.
There is wide agreement about the major goals of economic policy: high employment, stable prices, and rapid growth. There is less agreement that these goals are mutually compatible or, among those who regard them as incompatible, about the terms at which they can and should be substituted for one another. There is least agreement about the role that various instruments of policy can and should play in achieving the several goals.
In this paper, we scrutinise Oswald's evidence that home-ownership and unemployment are correlated across the US states. In order to abstract from state fixed-effects in levels, we analyse the cross-sectional variation in changes in home-ownership and unemployment rates between 1970 and 1990. After duplicating (nearly) Oswald's result, we illustrate the importance of weighting the state observations by the fraction of total US households in 1970 that resided in the respective states and of abstracting from the ageing of the population between 1970 and 1990: this causes Oswald's correlation to to disappear. Secondly, we estimate the relationship for six different age-classes and for household heads and total population. We find that the relationship is non-existent for both young households and old households, but exists for middle-aged households. Young households have accumulated little wealth and have had less time to become attached to the geographical area than middle-aged households and thus are more likely to respond to unemployment by relocating. Older households' employment cannot be greatly affected by home-ownership because their members are largely not in the labour force. Unemployment rates of household heads are affected less by tenure than those of the population as a whole.
The labor market in the Great Recession and its aftermath is characterized by great difficulty in escaping unemployment. I present two empirical analyses of a particular explanation for that difficulty, that the housing market crisis has prevented the unemployed from selling their homes and moving to take new jobs. First, I examine post-job-loss mobility rates by home ownership status using data from the Displaced Workers Survey. Second, I examine mobility rates for unemployed homeowners and renters from the month-to-month CPS match. Neither analysis provides any support for the idea that the housing market crisis has reduced mobility of the unemployed.
Modern zoning arose in the United States and spread rapidly among American cities and suburbs in the period 1910-1930. This article argues that the invention and propagation of motorized buses and trucks in that period best account for this enthusiastic acceptance of zoning. When industrial establishments and apartment development were dependent on rail transportation, developers of single-family homes could avoid these uncongenial neighbors simply by staying away from the rail and trolley lines. Around 1910, Ford's low-cost trucks and buses liberated industry and apartment dwellers from confinement near rail lines, and they sought lower-cost locations in residential areas. As a result of this threat, home developers found that buyers were unwilling to accept the risk of purchasing a home without sufficient protection for its value from neighborhood blight. Developers embraced zoning as an alternative to nonexistent home-value insurance and ineffective private covenants, and homeowners have ever since regarded zoning as their birthright. Homeowners skittishness about zoning changes, often derided as "NIMBYism" ("not in my back yard") is a rational response to the lack of home-value insurance. The further liberation of industry and low-income residents from central city locations by the interstate highway system of the 1960s may have accounted for the suburban growth-control movement of the 1970s. The article concludes by suggesting that one ingredient in a cure for the exclusionary aspects of suburban zoning would be home-value insurance. The numerous barriers to creating this insurance may warrant some public subsidy.
Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/9780199279166/toc.html
This paper considers some of the implications of the increase in UK unemployment since the beginning of the Great Recession. The major finding is that the sharp increase in unemployment and decrease in employment is largely concentrated on the young. This has occurred at a time when the size of the youth cohort is large. As a response to a lack of jobs there has been a substantial increase in applications to university, although there has only been a small rise in the number of places available. Further we find evidence that the unemployed have particularly low levels of well-being, are depressed, have low levels of life satisfaction, have difficulties paying their bills and are especially likely to be in financial difficulties.
The paper elucidates the relationship between housing tenure, regional mobility and unemployment. It develops a model that can explain the paradoxical empirical regularity that higher owner occupation rates are associated with higher levels of unemployment although homeowners tend to be unemployed less often. The choice of housing tenure affects moving costs and thereby regional mobility and unemployment. In addition, moving costs reduce on-the-job search effort and search effectiveness. The paper analyzes the impact of symmetric and asymmetric shocks on regional mobility and unemployment and discusses effects of government intervention in the housing market.
The aim of this paper is to provide a new mechanism for the spatial mismatch hypothesis. Spatial mismatch can here be the result of optimizing behavior on the part of the labor market participants. In particular, the unemployed can choose low amounts of search and long-term unemployment if they reside far away from jobs. They choose voluntary not to relocate close to jobs because the short-run gains (low land rent and large housing consumption) are big enough compared to the long-run gains of residing near jobs (higher probability of finding a job).
We develop two search-theoretic models emphasizing firm entry to examine the Oswald hypothesis, the idea that homeownership is linked to inferior labor market outcomes, and compare their predictions to three extant theories. The five models have surprisingly different predictions about the labor market at both the aggregate and micro levels. Using a suitable instrumental variable strategy, we estimate both micro and aggregate level regression models of wages and unemployment and compare the estimates to those predictions. We find that while homeowners are less likely to be unemployed, they also have lower wages, all else equal, compared to renters. In addition, higher regional homeownership rates are associated with a greater probability of individual worker unemployment and higher wages. The outcome of a horserace between our new search-theoretic models is mixed—the wage-posting model predicts observed unemployment impacts while a bargaining variant does a better job explaining observed wages and aggregate labor market outcomes. Overall, we conclude that firm behavior is important for understanding the labor market impacts of homeownership. Because this is the case, regional homeownership rates are not good instruments for individual tenure choice in empirical work. And while individual homeowners may have inferior labor market outcomes as compared to renters, from the viewpoint of society, higher homeownership rates may result in greater job creation and overall production, among other benefits.
The effect of unemployment on mental health was examined with meta-analytic methods across 237 cross-sectional and 87 longitudinal studies. The average overall effect size was d = 0.51 with unemployed persons showing more distress than employed persons. A significant difference was found for several indicator variables of mental health (mixed symptoms of distress, depression, anxiety, psychosomatic symptoms, subjective well-being, and self esteem). The average number of persons with psychological problems among the unemployed was 34%, compared to 16% among employed individuals. Moderator analyses demonstrated that men and people with blue-collar-jobs were more distressed by unemployment than women and people with white-collar jobs. Linear and curvilinear moderating effects of the duration of unemployment were also identified. Furthermore, the negative effect of unemployment on mental health was stronger in countries with a weak level of economic development, unequal income distributions, or weak unemployment protection systems compared to other countries. Meta-analyses of longitudinal studies and natural experiments endorsed the assumption that unemployment is not only correlated to distress but also causes it. Seemingly inconsistent longitudinal results of older meta-analyses can be explained by retest artifacts. We also identified mental-health related selection effects during job loss and job search, but they are weak. With an effect size of d = −.35 intervention programs for unemployed people were found to be moderately effective in ameliorating unemployment-related distress among continuously unemployed persons.
Using two decades of American Housing Survey data from 1985 to 2007, we revisit the literature on lock-in effects and provide new estimates of the impacts of negative equity and rising interest rates on the mobility of owners. Both lead to substantially lower mobility rates. Owners suffering from negative equity are one-third less mobile, and every added $1000 in real annual mortgage costs lowers mobility by about 12%. Our results cannot simply be extrapolated to the future, but they do have potentially important implications for policy makers concerned about the consequences of the housing bust that began as our data series ended. In particular, they indicate that we need to begin considering the consequences of lock-in and reduced household mobility because they are quite different from those associated with default and higher mobility.
This study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities. The theory demonstrates that if the amenity is also productive, then the sign of the wage gradient is unclear while the rent gradient is positive. The theory is extended to include the housing market and nontraded goods. These extensions require little modification of the conclusion. The empirical work on wages shows that the regional wage differences can be explained largely by these local attributes. With the use of site price data, implicit prices are estimated and quality of life rankings for the cities are computed.
In order to test for the effect of public housing occupancy on unemployment, we estimate a simultaneous probit model of unemployment and public housing. On a first sample, we instrument public housing with the gender composition of children. On a second sample, the instrument is the share of public housing at the city level. We also perform a robustness check that consists in measuring the correlation between unobservables that could explain the effect of public housing on unemployment. As the corresponding level of correlation is low, this check reinforces our result of no effect of public housing on unemployment.
From a prospective study of the impact of stress on health in 300 men assessed every six months, men who became unemployed after entering the study were compared with an equal number, matched for age and race, who continued to work. Psychological and health data after unemployment were compared between the two groups by multivariate analysis of variance and covariance. After unemployment, symptoms of somatization, depression, and anxiety were significantly greater in the unemployed than employed. Large standard deviations on self-esteem scores in the unemployed group suggested that some men coped better than others with job-loss stress. Further analysis showed those with higher esteem had more support from family and friends than did those with low self-esteem. Furthermore, unemployed men made significantly more visits to their physicians, took more medications, and spent more days in bed sick than did employed individuals even though the number of diagnoses in the two groups were similar.
We survey the microfoundations, empirical evidence and estimation issues underlying the aggregate matching function. Several microeconomic matching mechanisms have been suggested in the literature with some successes but none is generally accepted as superior to all others. Instead, an aggregate matching function with hires as a function of vacancies and unemployment has been successfully estimated for several countries. The Cobb-Douglas restrictions with constant returns to scale perform well. Recent work has utilized disaggregated data to go beyond aggregate estimates, with many refinements and suggestions for future research.
This article examines the effects of housing tenure on individuals' job and unemployment durations in the UK. We examine job to job transitions and transitions from unemployment. We take account of whether or not the arrival of a job was synonymous with a non-local residential move, tenure endogeneity and unobserved heterogeneity. We find that home-ownership is a constraint for the employed and public renting is more of a constraint for the unemployed. Employed home-owners have a lower transition into employment with a distant move and unemployed public renters have a lower probability of gaining employment in more distant labour markets. Copyright © 2008 The Author(s).
This paper contributes empirically to our understanding of informed traders. It analyzes traders' characteristics in a foreign exchange electronic limit order market via anonymous trader identities. We use six indicators of informed trading in a cross-sectional multivariate approach to identify traders with high price impact. More information is conveyed by those traders' trades which--simultaneously--use medium-sized orders (practice stealth trading), have large trading volume, are located in a financial center, trade early in the trading session, at times of wide spreads and when the order book is thin.
This paper reviews the empirical research that has been generated by Oswald’s thesis, which claims that there is a causal relationship from homeownership to unemployment. The literature confirms a decreasing effect of homeownership on geographical mobility of workers, but does not in general confirm that homeowners have longer unemployment spells or higher unemployment rates. Even though this finding is related to heterogeneity in the labour force and associated selectivity effects, there are clear indications that there is also an effect of homeownership on the search for jobs on the local labour market, especially for highly leveraged homeowners. To offer an integrated representation of the various forces at work, this paper proposes an umbrella model with endogenous search intensity that is consistent with much of the empirical evidence. In particular, it predicts lower geographical mobility of homeowners as well as higher exit rates from unemployment by acceptance of jobs on the local labour market.
In this paper we model a job-specific shock process in the matching model of unemployment with non-cooperative wage behaviour.
We obtain endogenous job creation and job destruction processes and study their properties. We show that an aggregate shock
induces negative correlation between job creation and job destruction whereas a dispersion shock induces positive correlation.
The job destruction process is shown to have more volatile dynamics than the job creation process. In simulations we show
that an aggregate shock process proxies reasonably well the cyclical behaviour of job creation and job destruction in the
United States.
0308 (27.27) -.0178 (14.48) Moved in same county -.0171 (18.38) -.0102 (9.05) Different county same state
- Non-Mover
Non-mover
-.0308 (27.27)
-.0178 (14.48)
Moved in same county
-.0171 (18.38)
-.0102 (9.05)
Different county same state
-.0126 (11.68)
-.0107 (7.94)
2012 Why has regional convergence in the US stopped? Working paper
- P A Ganong
- D Shoag
Ganong, P.A., and Shoag, D. 2012 Why has regional convergence in the US stopped? Working
paper, Kennedy School of Government, Harvard University.
A conjecture on the explanation for high unemployment in the industrialized nations: Part 1
- A J Oswald
Oswald, A.J. 1996. A conjecture on the explanation for high unemployment in the industrialized
nations: Part 1. University of Warwick Economic Research Paper 475.
Checking for an effect from unemployment benefits (the replacement rate): Log unemployment rate equations estimated using state year cells using the Merged Outgoing Rotation Group (MORG) files of the Current Population Survey
- Appendix Table
Appendix Table A1. Checking for an effect from unemployment benefits (the replacement rate): Log unemployment rate
equations estimated using state year cells using the Merged Outgoing Rotation Group (MORG) files of the Current Population
Survey, 1989-2011.
1989-2000
2001-2011
House-lock and structural unemployment. Working paper 2012-25, Federal Reserve Bank of
- R Valletta
Valletta, R. 2012. House-lock and structural unemployment. Working paper 2012-25, Federal
Reserve Bank of San Francisco.
The happiness equation. Icon Books: Duxford
- N Powdthavee
Powdthavee, N. 2010. The happiness equation. Icon Books: Duxford.
Home ownership and unemployment duration. Working paper
- A A Taskun
Taskun, A.A., and Yaman, F. 2013. Home ownership and unemployment duration. Working
paper, City University London.
0565 (5.08) -.0240 (14.19)
- Movers
Movers
.0565 (5.08)
-.0240 (14.19)
.0635 (22.81)
.0007 (0.45)
1,643,207