Homeownership and Labour Market Behaviour: Interpreting the Evidence

Tinbergen Institute Discussion Paper No. 07-047/3

36 Pages Posted: 21 Jun 2007

See all articles by Jan Rouwendal

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics; Tinbergen Institute

Date Written: June 2007

Abstract

This paper reviews the empirical research that has been generated by Oswald's thesis, which claims that there is a causal relationship from homeownership to unemployment. The literature confirms a decreasing effect of homeownership on geographical mobility of workers, but does not in general confirm that homeowners have longer unemployment spells or higher unemployment rates. Even though this finding is related to heterogeneity in the labour force and associated selectivity effects, there are clear indications that there is also an effect of homeownership on the search for jobs on the local labour market, especially for highly leveraged homeowners. To offer an integrated representation of the various forces at work, this paper proposes an umbrella model with endogenous search intensity that is consistent with much of the empirical evidence. In particular, it predicts lower geographical mobility of homeowners as well as higher exit rates from unemployment - by acceptance of jobs on the local labour market.

Keywords: thesis, labour market search, homeownership

JEL Classification: J61, J64, R21, R23

Suggested Citation

Rouwendal, Jan and Nijkamp, Peter, Homeownership and Labour Market Behaviour: Interpreting the Evidence (June 2007). Tinbergen Institute Discussion Paper No. 07-047/3, Available at SSRN: https://ssrn.com/abstract=995483 or http://dx.doi.org/10.2139/ssrn.995483

Jan Rouwendal (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446091 (Phone)
+31 20 4445611 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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