Moving to a Job: The Role of Home Equity, Debt, and Access to Credit

56 Pages Posted: 13 Mar 2013 Last revised: 20 Dec 2013

See all articles by Yuliya Demyanyk

Yuliya Demyanyk

University of Illinois at Chicago

Dmytro Hryshko

University of Alberta

Maria Jose Luengo-Prado

Indus Center for Academic Excellence

Bent E. Sørensen

University of Houston - Department of Economics; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: December 19, 2013

Abstract

Using individual-level credit reports merged with loan-level data on mortgages, we estimate how mobility relates to home equity and labor market conditions. We control for constant individual-specific traits with fixed effects and find that homeowners with negative home equity move to other metropolitan areas more than other homeowners. We use a dynamic quantitative model of consumption, housing, employment, and mobility to interpret our findings. The utility gain from accepting a higher-paid job in another area is negatively correlated with home equity. The relationship between home equity and mobility in the data is well replicated by the model.

Keywords: unemployment, mobility, mortgages, negative equity

JEL Classification: J61, G21, G01, D11, D12

Suggested Citation

Demyanyk, Yuliya and Hryshko, Dmytro and Luengo-Prado, Maria Jose and Sorensen, Bent E., Moving to a Job: The Role of Home Equity, Debt, and Access to Credit (December 19, 2013). Available at SSRN: https://ssrn.com/abstract=2232332 or http://dx.doi.org/10.2139/ssrn.2232332

Yuliya Demyanyk (Contact Author)

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

Dmytro Hryshko

University of Alberta ( email )

Edmonton, Alberta T6G 2R3
Canada

Maria Jose Luengo-Prado

Indus Center for Academic Excellence ( email )

Bent E. Sorensen

University of Houston - Department of Economics ( email )

204 McElhinney Hall
Houston, TX 77204-5882
United States
713-743-3841 (Phone)
713-743-3798 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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