Housing Tenure and Unemployment
74 Pages Posted: 21 Jul 2015
Date Written: June 1, 2015
In this article, we test whether tenure choice influences employment. This influence might arise through a number of channels, including transaction costs, lock-in effects, wealth effects, externalities and commuting times. These factors could collectively have either a positive or negative effect on employment outcomes. Using Current Population Survey panel data from 1988 to 2013, we conclude that tenure rates do not statistically influence employment growth rates. Using Panel Study of Income Dynamics data from 1994 to 2011 and Survey of Income and Program Participation data from 1995 to 2013, we conclude that home-owning does not increase peoples’ unemployment probabilities or significantly increase people’s unemployment spells or decrease people’s wages. But home-owning does affect employment by lengthening employment durations and increasing the likelihood of interstate moves. By investigating some features of home-owing - presence of mortgages, negative equity, wealth accumulation and attachment to communities - we conclude that having mortgages, negative equity and wealth accumulation might affect job outcomes, largely in a positive direction.
Keywords: homeownership, employment, mortgages, negative equity, wealth accumulation
JEL Classification: R23, C23, C41, E24
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