Almost Famous: The Short- and Long-Term Effects of Housing Wealth Shocks on Career Decisions

Abstract

Using a novel data set of career histories in the film industry, we study the effect of housing wealth shocks on the quality of jobs that individuals pursue. Homeowners facing greater declines in local house prices reduce their participation in high-quality projects, such as big-budget films and productions with award-winning talent, while increasing their involvement in low-quality films. Importantly, renters are not affected by these shocks. Consistent with individuals using home equity during job searches, these negative shocks have a greater impact on homeowners with lower equity and on those who extracted home equity before the Great Recession. Moreover, house price declines from the housing crisis also affect long-term career outcomes.

Keywords: Job Search, Long-term Career Effects, Housing Wealth Shocks, Home Equity Extraction