Does homeownership lead to longer unemployment spells? The role of mortgage payments
AbstractThis paper examines the impact of housing tenure choice on unemployment duration in Belgium using EU-SILC micro data. We contribute to the literature in distinguishing homeowners with mortgage payments and outright homeowners. We simultaneously estimate unemployment duration by a mixed proportional hazard model, and the probability of being an outright homeowner, a homeowner with mortgage payments or a tenant by a mixed multinomial logit model. To be able to correctly identify the causal influence of different types of housing tenure on unemployment duration, we use instrumental variables. Our results show that homeowners with a mortgage exit unemployment first. Outright owners stay unemployed the longest. Tenants take an intermediate position. Moreover, our results reveal the different share of mortgage holders within the group of homeowners as a possible explanation for the discrepancy between former contributions to this literature.
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Bibliographic InfoPaper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 13/858.
Length: 27 pages
Date of creation: Oct 2013
Date of revision:
unemployment; housing tenure; duration analysis;
Other versions of this item:
- Baert, Stijn & Heylen, Freddy & Isebaert, Daan, 2013. "Does Homeownership Lead to Longer Unemployment Spells? The Role of Mortgage Payments," IZA Discussion Papers 7774, Institute for the Study of Labor (IZA).
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-22 (All new papers)
- NEP-EUR-2013-11-22 (Microeconomic European Issues)
- NEP-LAB-2013-11-22 (Labour Economics)
- NEP-URE-2013-11-22 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Did home ownership made things worse in the Great Recession?
by Economic Logician in Economic Logic on 2014-01-14 16:38:00
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