Dream Chasers: The Draw and the Downside of Following House Price Signals

53 Pages Posted: 21 Apr 2020 Last revised: 8 Jun 2020

See all articles by Taylor A. Begley

Taylor A. Begley

Washington University in St. Louis - John M. Olin Business School

Peter H. Haslag

Vanderbilt University - Finance

Daniel Weagley

Georgia Institute of Technology - Scheller College of Business

Date Written: April 16, 2020

Abstract

We study individual labor market decisions during the house price run-up of the early 2000s using the career paths of nearly 7 million workers. We find that individuals switch careers to become real estate agents (REAs) at higher rates in areas with stronger house price growth, despite little or no growth in average REA wages. We find that those drawn into real estate come from virtually all parts of the skill, wage, and education spectrums, and respond to both fundamental and non-fundamental house price growth. Examining wages, we find that those drawn into REA near the peak of the run-up experienced substantially lower wage paths than similar non-entrants through the end of our sample in 2017. These effects are particularly severe for entrants in areas with higher non-fundamental growth. Overall, we shed light on some important consequences of house price fluctuations, both fundamental and non-fundamental, on labor market outcomes.

Keywords: House Prices, Human Capital, Job Switching, Career Choice, Real Estate Agents

JEL Classification: E32, J24, J31, R21, R31

Suggested Citation

Begley, Taylor A. and Haslag, Peter H. and Weagley, Daniel, Dream Chasers: The Draw and the Downside of Following House Price Signals (April 16, 2020). Vanderbilt Owen Graduate School of Management Research Paper. Available at SSRN: https://ssrn.com/abstract=3577828 or http://dx.doi.org/10.2139/ssrn.3577828

Taylor A. Begley (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

HOME PAGE: http://www.taylorbegley.com

Peter H. Haslag

Vanderbilt University - Finance ( email )

401 21st Avenue South
Nashville, TN 37203
United States

HOME PAGE: http://https://www.sites.google.com/site/peterhaslag/

Daniel Weagley

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States
(404) 385-3015 (Phone)

HOME PAGE: http://www.danielweagley.com

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