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The Impact of Home Ownership on the Duration of Unemployment

Author

Listed:
  • Ernest P. Goss

    (Creighton University)

  • Joseph M. Phillips

    (Creighton University)

Abstract

Housing stock is one of the most important components of household wealth in the U.S. Public policy has vigorously promoted home ownership based on the belief that it strengthens the individual's commitment and contribution to the community. Yet it is possible that this social goal generates unanticipated consequences in the labor market. This study examines potential labor market influences of home ownership, focusing on the length of unemployment. Using a sample of unemployed workers from the 1986 Panel Study of Income Dynamics, this study concludes that for some unemployed, home ownership significantly reduces unemployment duration. This appears to occur through two channels. First, the burden of monthly mortgage payments stimulates more vigorous job search, and second, home equity aids job search through a wealth effect.

Suggested Citation

  • Ernest P. Goss & Joseph M. Phillips, 1997. "The Impact of Home Ownership on the Duration of Unemployment," The Review of Regional Studies, Southern Regional Science Association, vol. 27(1), pages 9-27, Summer.
    • Handle: RePEc:rre:publsh:v:27:y:1997:i:1:p:9-27
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    References listed on IDEAS

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    Cited by:

    1. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.
    2. Andrea Morescalchi, 2016. "The Puzzle Of Job Search And Housing Tenure: A Reconciliation Of Theory And Empirical Evidence," Journal of Regional Science, Wiley Blackwell, vol. 56(2), pages 288-312, March.
    3. Andrea Morescalchi, 2021. "A new career in a new town. Job search methods and regional mobility of unemployed workers," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(2), pages 223-272, May.
    4. Harminder Battu & Ada Ma & Euan Phimister, 2008. "Housing Tenure, Job Mobility and Unemployment in the UK," Economic Journal, Royal Economic Society, vol. 118(527), pages 311-328, March.
    5. Cynthia Sanders & Shirley Porterfield, 2010. "The Ownership Society and Women: Exploring Female Householders’ Ability to Accumulate Assets," Journal of Family and Economic Issues, Springer, vol. 31(1), pages 90-106, March.
    6. Sander van Veldhuizen & Bart Voogt & Benedikt Vogt & Andrea Morescalchi, 2017. "Negative home equity and job mobility," CPB Discussion Paper 345.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Paul Flatau & Matt Forbes & Patric H. Hendershott, 2003. "Homeownership and Unemployment: The Roles of Leverage and Public Housing," NBER Working Papers 10021, National Bureau of Economic Research, Inc.
    8. Francesco Arzilli & Andrea Morescalchi, 2011. "Housing Tenure and Job Search Behaviour. A Different Analysis of the Impact of the UK Jobseeker's Allowance," Discussion Papers 2011/111, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    9. Stijn Baert & Freddy Heylen & Daan Isebaert, 2014. "Does Homeownership Lead to Longer Unemployment Spells? The Role of Mortgage Payments," De Economist, Springer, vol. 162(3), pages 263-286, September.
    10. Sander van Veldhuizen & Bart Voogt & Benedikt Vogt & Andrea Morescalchi, 2017. "Negative home equity and job mobility," CPB Discussion Paper 345, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Laura Kawano & Sara LaLumia, 2017. "How Income Changes During Unemployment: Evidence from Tax Return Data," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 418-456.
    12. Yang, Xi, 2019. "The effects of home ownership on post-unemployment wages," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 1-17.
    13. Martha Starr, 2014. "Gender, added-worker effects, and the 2007–2009 recession: Looking within the household," Review of Economics of the Household, Springer, vol. 12(2), pages 209-235, June.
    14. Johnson, Thomas G., 2002. "Where is the Place in Space?," The Review of Regional Studies, Southern Regional Science Association, vol. 32(1), pages 9-17, Winter/Sp.
    15. repec:wil:wileco:2012-10 is not listed on IDEAS
    16. Meekes, Jordy & Hassink, Wolter H.J., 2019. "The role of the housing market in workers′ resilience to job displacement after firm bankruptcy," Journal of Urban Economics, Elsevier, vol. 109(C), pages 41-65.
    17. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute of Labor Economics (IZA).

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