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Homeownership, mobility, and unemployment: Evidence from housing privatization

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  • Broulíková, Hana M.
  • Huber, Peter
  • Montag, Josef
  • Sunega, Petr

Abstract

Homeownership is believed to cause higher unemployment. This is because homeowners face higher mobility costs that limit their job search to local labor markets. Empirical tests of this prediction have yielded mixed results so far, possibly due to the endogeneity of homeownership. This paper proposes that the privatization of public housing in Central and Eastern Europe after the fall of the Iron Curtain was a substantial policy shock that generated largely exogenous assignment of homeownership to individual households. This facilitates a new test of the effects of homeownership on mobility and unemployment: First, our empirical results do not reject that homeownership reduces mobility. Second, our results are inconsistent with homeownership increasing unemployment.

Suggested Citation

  • Broulíková, Hana M. & Huber, Peter & Montag, Josef & Sunega, Petr, 2020. "Homeownership, mobility, and unemployment: Evidence from housing privatization," Journal of Housing Economics, Elsevier, vol. 50(C).
  • Handle: RePEc:eee:jhouse:v:50:y:2020:i:c:s1051137720300644
    DOI: 10.1016/j.jhe.2020.101728
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    Cited by:

    1. Broulíková Hana M. & Montag Josef, 2020. "Housing Privatization in Transition Countries: Institutional Features and Outcomes," Review of Economic Perspectives, Sciendo, vol. 20(1), pages 51-71, March.
    2. Peter Huber & Josef Montag, 2020. "Homeownership, Political Participation, and Social Capital in Post‐Communist Countries and Western Europe," Kyklos, Wiley Blackwell, vol. 73(1), pages 96-119, February.
    3. Gohl, Niklas, 2019. "House prices and spatial mobility: Lock-in effects on the German rental market," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203557, Verein für Socialpolitik / German Economic Association.
    4. Stepan Mikula & Josef Montag, 2019. "Does homeownership hinder labor market activity? Evidence from housing privatization and restitution in Brno," MUNI ECON Working Papers 2019-06, Masaryk University.
    5. Peter Huber & Stepan Mikula, 2019. "Social capital and willingness to migrate in post-communist countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(1), pages 31-59, February.
    6. Pennerstorfer, Dieter & Schindler, Nora & Weiss, Christoph R. & Yontcheva, Biliana, 2020. "Income inequality and product variety: Empirical evidence," DICE Discussion Papers 353, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    7. Mangum, Kyle & Molloy, Raven, 2021. "Migration and Housing special issue: Introduction from Editors Kyle Mangum and Raven Molloy," Journal of Housing Economics, Elsevier, vol. 53(C).

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    More about this item

    Keywords

    Homeownership; Housing privatization; Mobility; Unemployment;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights

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