House Prices, Wealth Effects and Labour Supply
AbstractWe examine the impact of housing wealth on labour supply using exogenous local variations in house prices and household panel data for Britain. Our analysis controls for variations in local labour demand and income expectations which might co-determine house prices and labour supply. We find significant effects of house price variations on labour supply, consistent with leisure being a normal good. Labour supply is particularly sensitive to house prices among the young and older men. Our findings imply that housing wealth losses may have contributed to the unexpectedly high rates of labour market activity in Britain during the Great Recession.
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Bibliographic InfoPaper provided by University of Nottingham, School of Economics in its series Discussion Papers with number 13/02.
Date of creation: Feb 2013
Date of revision:
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Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/economics/
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Labour supply; Wealth effects; House prices JEL codes: E51; E52; F31; F33;
Find related papers by JEL classification:
- Hou - Public Economics - - - - -
- pri - - - - - -
- JEL - Labor and Demographic Economics - - - - -
- cod - - - - - -
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-20 (All new papers)
- NEP-EUR-2013-07-20 (Microeconomic European Issues)
- NEP-LMA-2013-07-20 (Labor Markets - Supply, Demand, & Wages)
- NEP-MAC-2013-07-20 (Macroeconomics)
- NEP-URE-2013-07-20 (Urban & Real Estate Economics)
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