Housing Prices and Formal Employment in Mexico: Evidence of Temporal Precedence and Regional Heterogeneity

This study examines the dynamic relationship between housing prices and formal employment registered with Mexico's Social Security Institute (IMSS), emphasizing temporal precedence and territorial heterogeneity. It uses quarterly data for the 32 federal entities from 2006Q1 to 2025Q4, combining the SHF Housing Price Index with IMSS administrative records on wage-associated jobs and average wages. Variables are expressed as annual rates of change relative to the same quarter of the previous year. The empirical strategy estimates bivariate VAR models by federal entity and applies Granger causality tests after verifying stationarity and selecting lag orders with information criteria. Results reveal heterogeneous patterns: in some entities, employment or wage changes statistically precede subsequent changes in housing prices; in others, housing prices contain information useful for anticipating formal employment. The findings are interpreted as evidence of dynamic association and predictive capacity, not as identification of structural causal effects. The study provides comparable state-level evidence on the temporal interaction between formal labor and housing markets and documents relevant territorial differences for their economic interpretation.