Locked in by Leverage: Job Search during the Housing Crisis

50 Pages Posted: 8 Dec 2016 Last revised: 27 Jul 2017

See all articles by Jennifer Brown

Jennifer Brown

University of Utah - Department of Finance

David A. Matsa

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: July 26, 2017

Abstract

This paper examines how housing market distress affects job search. Using data from a leading online job search platform during the Great Recession, we find that job seekers in areas with depressed housing markets apply for fewer jobs that require relocation. With their search constrained geographically, job seekers broaden their search to lower level positions nearby. These effects are stronger for job seekers with recourse mortgages, which we confirm using spatial regression discontinuity analysis. Our findings suggest that housing market distress distorts labor market outcomes by impeding households’ ability to move.

Keywords: Job Search, Mortgage Leverage, Mobility

JEL Classification: J64, R23, R21, D14

Suggested Citation

Brown, Jennifer and Matsa, David A., Locked in by Leverage: Job Search during the Housing Crisis (July 26, 2017). Available at SSRN: https://ssrn.com/abstract=2880784 or http://dx.doi.org/10.2139/ssrn.2880784

Jennifer Brown

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

David A. Matsa (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8337 (Phone)
847-491-5719 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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