Does High Home-Ownership Impair the Labor Market?
By David G. Blanchflower, Andrew J. Oswald. Social Science Research Network, 2013
167 citations recorded by the source corpus.
We explore the hypothesis that high home-ownership damages the labor market. Our results are relevant to, and may be worrying for, a range of policymakers and researchers. We fi nd that rises in the home-ownership rate in a US state are a precursor to eventual sharp rises in unemployment in that state. Th e elasticity exceeds unity: A doubling of the rate of home-ownership in a US state is followed in the long-run by more than a doubling of the later unemployment rate. What mechanism might explain this? We show that rises in home-ownership lead to three problems: (i) lower levels of labor mobility, (ii) greater commuting times, and (iii) fewer new businesses. Our argument is not that owners themselves are disproportionately unemployed. Th e evidence suggests, instead, that the housing market can produce negative ‘externalities’ upon the labor market. Th e time lags are long. Th at gradualness may explain why these important patterns are so little-known.
Subfields: Economics and Econometrics, Finance, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/e00bbf4d96d3ed6560795dce90141e4bb41e948f
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Citations in the corpus
- On the macroeconomic determinants of the housing market in Greece: a VECM approach (2016, background): “Blanchflower and Oswald (2013) and Oswald (1999) connect the labour mobility and the home ownership rate and find evidence of negative externalities of the housing market on the labour market.”
- Why Has Regional Income Convergence in the U.S. Declined (2017, unknown): “5 We build on an older tradition of work by economic historians (Easterlin 1958 and Williamson 1965) as formalized by Braun [1993], in which directed migration drives convergence.”