Negative equity does not reduce homeowners’ mobility
Many researchers, policymakers, and pundits have argued that the housing crisis may harm labor markets because homeowners who owe more than their homes are worth are less likely to move to places that have productive job opportunities. I show that, in the available data, negative equity does not make homeowners less mobile. In fact, homeowners who have negative equity are slightly more likely to move than homeowners who have positive equity. Ferreira, Gyourko, and Tracy’s (2010) contrasting result that negative equity reduces mobility arises because they systematically drop some negative-equity homeowners’ moves from the data
Volume (Year): (2012)
Issue (Month): Feb ()
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- Daniel Aaronson & Jonathan Davis, 2011. "How much has house lock affected labor mobility and the unemployment rate?," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Sep.
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- Andrew F. Haughwout & Richard Peach & Joseph Tracy, 2009.
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418, Federal Reserve Bank of New York.
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- Aigner, Dennis J., 1973. "Regression with a binary independent variable subject to errors of observation," Journal of Econometrics, Elsevier, vol. 1(1), pages 49-59, March.
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