House Prices, Wealth Effects and Labour Supply

49 Pages Posted: 14 Nov 2016 Last revised: 11 Jan 2018

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: October 14, 2016


We examine the impact of house prices on labour supply decisions using UK micro data. We combine household survey data with local level house price measures and controls for local labour demand. Our micro data also allows us to control for individual level income expectations. We find significant house price effects on labour supply, consistent with leisure being a normal good. Labour supply responses to house prices are concentrated among young married female owners and older owners. This finding suggests house prices affect the decisions of marginal workers in the economy. Our estimates imply house prices are economically important for the participation decisions for these workers.

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 (October 14, 2016). CFS Working Paper, No. 556, Available at SSRN: or

Richard F. Disney (Contact Author)

University of Nottingham ( email )

School of Economics
Nottingham NG7 2RD
United Kingdom
+44 115 951 5620 (Phone)
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Institute for Fiscal Studies (IFS)

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Axia Economics ( email )

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John Gathergood

University of Nottingham - School of Economics ( email )

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University Park
Nottingham, NG7 2RD
United Kingdom

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