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Home-ownership and the Labour Market: Evidence from Rental Housing Market Deregulation

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  • Laamanen, Jani-Petri

Abstract

Perhaps the most common finding relating housing to the labour market is that high home-ownership rates are associated with higher unemployment. In contrast, recent micro-evidence suggests that home-owners have relatively favourable labour market outcomes. We explore the effect of home-ownership on unemployment exploiting a rental housing market deregulation reform which created exogenous variation in home-ownership across regions, allowing us to avoid the endogeneity problem in earlier studies. While home-owners are less likely to experience unemployment, an increase in the home-ownership rate causes unemployment to rise. Externalities arising from consumption reductions and increased job competition may explain the conflicting evidence.

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  • Laamanen, Jani-Petri, 2017. "Home-ownership and the Labour Market: Evidence from Rental Housing Market Deregulation," Labour Economics, Elsevier, vol. 48(C), pages 157-167.
    • Handle: RePEc:eee:labeco:v:48:y:2017:i:c:p:157-167
    DOI: 10.1016/j.labeco.2017.08.005
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    More about this item

    Keywords

    Home-ownership; Unemployment; Instrumental variables (IV) estimation;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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