Locked in by Leverage: Job Search during the Housing Crisis
50 Pages Posted: 8 Dec 2016 Last revised: 27 Jul 2017
Date Written: July 26, 2017
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: Suggested Citation