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Unaffordable housing and local employment growth: Evidence from California municipalities

Author

Listed:
  • Ritashree Chakrabarti

    (IHS Global Insight, USA)

  • Junfu Zhang

    (Clark University, USA)

Abstract

It is widely believed that unaffordable housing could drive businesses away and thus impede job growth. However, there is little evidence to support this view. This paper presents a simple model to clarify how housing affordability is linked to employment growth and why unaffordable housing could negatively affect employment growth. The paper then investigates this effect empirically using data on California municipalities. For various reasons, a simple correlation between unaffordable housing and employment growth cannot be interpreted as causal. Several empirical strategies are employed to identify the causal effect of unaffordable housing on employment growth. The estimation results provide consistent evidence that unaffordable housing indeed slows local employment growth.

Suggested Citation

  • Ritashree Chakrabarti & Junfu Zhang, 2015. "Unaffordable housing and local employment growth: Evidence from California municipalities," Urban Studies, Urban Studies Journal Limited, vol. 52(6), pages 1134-1151, May.
  • Handle: RePEc:sae:urbstu:v:52:y:2015:i:6:p:1134-1151
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    References listed on IDEAS

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    Cited by:

    1. Osei, Michael J. & Winters, John V., 2018. "Labor Demand Shocks and Housing Prices across the US: Does One Size Fit All?," IZA Discussion Papers 11636, Institute for the Study of Labor (IZA).
    2. repec:taf:specan:v:12:y:2017:i:4:p:472-491 is not listed on IDEAS

    More about this item

    Keywords

    amenity; California; employment growth; housing affordability;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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