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Housing market regulation and the social demand for job protection

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  • van Ypersele, Tanguy
  • Decreuse, Bruno

Abstract

Controlling for country fixed effects, there is a positive and statistically significant relationship between the degree of housing market regulation (HMR) and the strictness of employment protection legislation (EPL) in OECD countries. We provide a model in which HMR increases foreclosure costs in case of mortgage default, while EPL raises the administrative cost of dismissal. Owing to banks lending behavior, individuals' demand for job protection increases with the cost of foreclosure. We use the model to discuss social housing and family insurance, the case for mortgage unemployment insurance, regulations on the use of fixed-term contracts, the impact of min down-payment policies, feed-back effects from HMR to EPL, and the failure of a 2006 French reform of the labor contracts.

Suggested Citation

  • van Ypersele, Tanguy & Decreuse, Bruno, 2010. "Housing market regulation and the social demand for job protection," CEPR Discussion Papers 7845, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:7845
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    Cited by:

    1. Antoine Bonleu, 2019. "Procedural Formalism and Social Networks in the Housing Market," Annals of Economics and Statistics, GENES, issue 133, pages 25-56.
    2. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    3. repec:hal:spmain:info:hdl:2441/8812 is not listed on IDEAS
    4. Antoine Bonleu & Bruno Decreuse & Tanguy van Ypersele, 2019. "Job protection, housing market regulation, and the youth," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(6), pages 1017-1036, December.
    5. Antoine Bonleu, 2017. "Sun, Regulation and Local Social Networks," Working Papers halshs-01502604, HAL.
    6. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    7. Estache, Antonio & Foucart, Renaud, 2021. "On the political economy of industrial, labor and social reforms as complements," European Economic Review, Elsevier, vol. 137(C).

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    More about this item

    Keywords

    Fixed-term contracts; Foreclosure costs; Job protection;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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