Home Ownership As a Labor Market Friction

35 Pages Posted: 24 Mar 2018

See all articles by Daniel Ringo

Daniel Ringo

Board of Governors of the Federal Reserve System

Date Written: March 17, 2017

Abstract

This paper estimates the effect of home ownership on individuals' unemployment. Because of higher moving costs, home owners will be less willing than renters to re- locate for work and could therefore face longer unemployment spells. Estimation is complicated by the endogeneity of ownership, as owners will have different abilities, preferences and job prospects than renters. I instrument for home ownership using a preference shifter from the worker's childhood environment. The results indicate that home ownership is a significant hindrance to mobility, and homeowners suffer longer unemployment spells and more frequent job loss because of it.

Keywords: home ownership, unemployment, job search, mobility

JEL Classification: J6, R2, R3, D1

Suggested Citation

Ringo, Daniel, Home Ownership As a Labor Market Friction (March 17, 2017). Available at SSRN: https://ssrn.com/abstract=3144673 or http://dx.doi.org/10.2139/ssrn.3144673

Daniel Ringo (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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