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The short-term relationship between unemployment and home ownership

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  • Dominik Stroukal

Abstract

This work focuses on the Oswald hypothesis and answers the question about what the relationship is between changes in home ownership and unemployment on an individual level in the Czech Republic. The first and main hypothesis is that a transition to home ownership reduces the probability of unemployment in the following year. Data from EU-SILC proves that this hypothesis holds true, but only for men and not for women. With this in mind, we present a second hypothesis that argues that the relationship between homeownership and unemployment on an individual level varies over time in relation to the lower and higher probability of unemployment. The primary reason for this is the “mortgage effect†, which is later outweighed by the migration effect. The research shows that the transition to unemployment does not affect the possibility of a transition to home ownership in the following year, neither for men nor women. For the third hypothesis, the expectation was that there would be a significant difference between men and women. This was confirmed because the first hypothesis holds true only for men and not for women.

Suggested Citation

  • Dominik Stroukal, 2016. "The short-term relationship between unemployment and home ownership," Littera Scripta, VSTE, vol. 9(1), pages 140-153, May.
    • Handle: RePEc:rsg:littra:2016-011
    DOI: 10.36708/LS.2016.I01.011
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    References listed on IDEAS

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    1. Martin Konecný & Dominik Stroukal, 2015. "Does housing market impair employment in The Czech Republic?," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 8(3), pages 318-334, August.
    2. Anthony O'Sullivan & Kenneth Gibb, 2012. "Housing Taxation and the Economic Benefits of Homeownership," Housing Studies, Taylor & Francis Journals, vol. 27(2), pages 267-279.
    3. repec:eme:ijhma0:ijhma-09-2014-0039 is not listed on IDEAS
    4. Stijn Baert & Freddy Heylen & Daan Isebaert, 2014. "Does Homeownership Lead to Longer Unemployment Spells? The Role of Mortgage Payments," De Economist, Springer, vol. 162(3), pages 263-286, September.
    5. Jakob Roland Munch & Michael Rosholm & Michael Svarer, 2006. "Are Homeowners Really More Unemployed?," Economic Journal, Royal Economic Society, vol. 116(514), pages 991-1013, October.
    6. D. Isebaert, 2013. "Housing Tenure and Geographical Mobility in Belgium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 13/855, Ghent University, Faculty of Economics and Business Administration.
    7. Leoš Vitek & Jan Pavel & Jana Krbova, 2004. "Effectiveness of the Czech Tax System," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 4(2), pages 55-71, July.
    8. Martin Konecný & Dominik Stroukal, 2015. "Does housing market impair employment in The Czech Republic?," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 8(3), pages 318-334, August.
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