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Determinants of homelessness in the U.S.: new hypotheses and evidence

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  • Richard J. Cebula
  • James William Saunoris

Abstract

This study seeks to provide new insights into factors that influence homelessness in the U.S. by empirically investigating two heretofore effectively unexplored hypotheses as they relate to homelessness. The first hypothesis is that the greater the overall degree of entrepreneurial activity in a given environment, the lower the degree of homelessness. The second hypothesis is that homelessness is a decreasing function of the overall degree of labour market freedom.Panel VAR, Granger causality, and Cholesky forecast-error variance decomposition analyses are undertaken. Overall, strong, empirical support for both hypotheses is obtained. Accordingly, the homelessness rate is found to be a decreasing function of both the overall degree of entrepreneurial activity in a given state and the overall degree of labour market freedom in that state. Hence, it is argued that policies promoting entrepreneurial activity and labour freedom potentially can be useful tools in helping to diminish the degree of homelessness in the U.S.

Suggested Citation

  • Richard J. Cebula & James William Saunoris, 2021. "Determinants of homelessness in the U.S.: new hypotheses and evidence," Applied Economics, Taylor & Francis Journals, vol. 53(49), pages 5695-5709, October.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:49:p:5695-5709
    DOI: 10.1080/00036846.2021.1927970
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