House Prices, Wealth Effects and Labour Supply

38 Pages Posted: 20 Jul 2013

See all articles by Richard F. Disney

Richard F. Disney

University of Nottingham; Institute for Fiscal Studies (IFS); Axia Economics

John Gathergood

University of Nottingham - School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2013


We examine the impact of housing wealth on labour supply using exogenous local variations in house prices and household panel data for Britain. Our analysis controls for variations in local labour demand and income expectations which might co-determine house prices and labour supply. We find significant effects of house price variations on labour supply, consistent with leisure being a normal good. Labour supply is particularly sensitive to house prices among the young and older men. Our findings imply that housing wealth losses may have contributed to the unexpectedly high rates of labour market activity in Britain during the Great Recession.

Keywords: labour supply, wealth effects, house prices

JEL Classification: D12, E21, J22

Suggested Citation

Disney, Richard F. and Gathergood, John, House Prices, Wealth Effects and Labour Supply (July 2013). Available at SSRN: or

Richard F. Disney

University of Nottingham ( email )

School of Economics
Nottingham NG7 2RD
United Kingdom
+44 115 951 5620 (Phone)
+44 115 951 4159 (Fax)

Institute for Fiscal Studies (IFS)

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Axia Economics ( email )

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London SW2 5TA
United Kingdom

John Gathergood (Contact Author)

University of Nottingham - School of Economics ( email )

Sir Clive Granger Building
University Park
Nottingham, NG7 2RD
United Kingdom

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