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Moving to a Job: The Role of Home Equity, Debt, and Access to Credit

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  • Demyanyk, Yuliya
  • Hryshko, Dmytro
  • Luengo-Prado, Maria Jose
  • Sørensen, Bent E

Abstract

Using credit report data from two of the three major credit bureaus in the United States, we infer with high certainty whether households move to other labor markets defined by metropolitan areas. We estimate how moving patterns relate to labor market conditions, personal credit, and homeownership using panel regressions with fixed effects which control for all constant individual-specific traits. We interpret the patterns through simulations of a dynamic model of consumption, housing, and location choice. We find that homeowners with negative home equity move more than other homeowners, in particular when local unemployment growth is high---overall, negative home equity is not an important barrier to labor mobility.

Suggested Citation

  • Demyanyk, Yuliya & Hryshko, Dmytro & Luengo-Prado, Maria Jose & Sørensen, Bent E, 2013. "Moving to a Job: The Role of Home Equity, Debt, and Access to Credit," CEPR Discussion Papers 9474, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9474
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    References listed on IDEAS

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    1. Christian Bayer & Falko Juessen, 2012. "On the Dynamics of Interstate Migration: Migration Costs and Self-Selection," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(3), pages 377-401, July.
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    Citations

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    Cited by:

    1. Demyanyk, Yuliya & Luengo-Prado, Maria Jose & Hryshko, Dmytro & Sorensen, Bent E., 2015. "The Rise and Fall of Consumption in the 2000s," Working Paper 1507, Federal Reserve Bank of Cleveland.
    2. Stepanchuk Serhiy & Ádám Reiff, 2012. "11th Annual Macroeconomic Policy Research Workshop at MNB: Microeconomic Behavior and its Macroeconomic Implications During the Financial Crisis," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 7(3), pages 67-72, October.
    3. Demyanyk, Yuliya, 2017. "The impact of missed payments and foreclosures on credit scores," The Quarterly Review of Economics and Finance, Elsevier, vol. 64(C), pages 108-119.
    4. Jung Choi & Gary Painter, 2015. "Housing Formation and Unemployment Rates: Evidence from 1975–2011," The Journal of Real Estate Finance and Economics, Springer, vol. 50(4), pages 549-566, May.
    5. Wardrip, Keith & Hunt, Robert M., 2013. "Residential Migration, Entry, and Exit as Seen Through the Lens of Credit Bureau Data," Payment Cards Center Discussion Paper 13-4, Federal Reserve Bank of Philadelphia.
    6. Florian Oswald, 2015. "Regional Shocks, Migration and Homeownership," Sciences Po publications info:hdl:2441/n1d9kd7k48k, Sciences Po.
    7. Florian Oswald, 2015. "Regional Shocks, Migration and Homeownership," 2015 Meeting Papers 759, Society for Economic Dynamics.
    8. Popov, Alexander & Zaharia, Sonia, 2017. "Credit market competition and the gender gap: evidence from local labor markets," Working Paper Series 2086, European Central Bank.
    9. Parkhomenko, Andrii, 2016. "Opportunity to Move: Macroeconomic Effects of Relocation Subsidies," MPRA Paper 75256, University Library of Munich, Germany.
    10. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    credit contraint; credit reports; mobility; unemployment;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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