Homeownership and Labour Market Outcomes: Micro Versus Macro Performances

28 Pages Posted: 8 Nov 2014

See all articles by Julie Beugnot

Julie Beugnot

Université Laval

Guy Lacroix

Université Laval - Département d'Économique; IZA Institute of Labor Economics

Olivier Charlot

University of Cergy-Pontoise

Abstract

In this paper we investigate Oswald's hypothesis according to which higher homeownership rates increase aggregate unemployment rates. To this end, we develop a matching model à la Pissarides (2000) in which homeowners are assumed to be less mobile than tenants. Based on numerical simulations, we analyze both macroeconomic and microeconomic labour market outcomes following an (exogenous) increase in homeownership rates. We show that (1) Oswald's hypothesis does not always hold as it depends crucially on the importance of mobility costs; (2) while higher homeownership may harm macroeconomic labour market performances, individual performances always improve following an increase in homeownership rates.

Keywords: stochastic job matching, Oswald's hypothesis, homeownership, unemployment, mobility

JEL Classification: J41, J61, J64, E24

Suggested Citation

Beugnot, Julie and Lacroix, Guy and Charlot, Olivier, Homeownership and Labour Market Outcomes: Micro Versus Macro Performances. IZA Discussion Paper No. 8599, Available at SSRN: https://ssrn.com/abstract=2520774

Julie Beugnot (Contact Author)

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Guy Lacroix

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada
418-656-2024 (Phone)
418-656-7798 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Olivier Charlot

University of Cergy-Pontoise ( email )

33 Boulevard du Port
Cergy-Pontoise Cedex, Cedex 95011
France

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