House Prices, Wealth Effects and Labour Supply

30 Pages Posted: 12 Jun 2018

See all articles by Richard Disney

Richard Disney

University of Sussex

John Gathergood

University of Nottingham - School of Economics

Date Written: July 2018

Abstract

We examine the impact of house prices on labour supply decisions using UK microdata. We combine household survey data with local‐level house price measures and controls for local labour demand. Our microdata also allow 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 that house prices affect the decisions of marginal workers in the economy. Our estimates imply that house prices are economically important in the participation decisions for these workers.

Suggested Citation

Disney, Richard and Gathergood, John, House Prices, Wealth Effects and Labour Supply (July 2018). Economica, Vol. 85, Issue 339, pp. 449-478, 2018. Available at SSRN: https://ssrn.com/abstract=3192685 or http://dx.doi.org/10.1111/ecca.12253

Richard Disney (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

John Gathergood

University of Nottingham - School of Economics ( email )

Sir Clive Granger Building
University Park
Nottingham, NG7 2RD
United Kingdom

HOME PAGE: http://https://sites.google.com/site/gathergoodjohn/

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