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Does promoting homeownership always damage labour market performances?

Author

Listed:
  • Julie Beugnot

    (Université Bourgogne Franche-Comté, CRESE)

  • Guy Lacroix

    (Université Laval, CRREP, CIRANO)

  • Olivier Charlot

    (Université de Cergy Ponthoise, THEMA)

Abstract

In this paper we analyze the link between homeownership and various aggregate and individual labour market outcomes. Our aim is to investigate the likely consequences of public policies that promote homeownership. To this end, we develop a circular firm-worker matching model with Nash wage bargaining and free market entry. Homeowners are assumed to be less mobile than tenants due to higher mobility costs mainly induced by housing market frictions. Through extensive numerical simulations, we show that: (1) Higher homeownership rates need not lead to higher unemployment rates, contrary to the so-called Oswald's hypothesis, but depends crucially on the importance of mobility costs mainly driven by housing market regulation; (2) while increased homeownership may prove harmful to some macroeconomic labour market indicators, it is always beneficial to individuals' labour market performances.

Suggested Citation

  • Julie Beugnot & Guy Lacroix & Olivier Charlot, 2017. "Does promoting homeownership always damage labour market performances?," Working Papers 2017-05, CRESE.
    • Handle: RePEc:crb:wpaper:2017-05
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    Cited by:

    1. Carole Brunet & Thierry Kamionka & Guy Lacroix, 2025. "Homeownership, Labour Market Transitions and Earnings," Applied Economics, Taylor & Francis Journals, vol. 57(14), pages 1614-1636, March.
    2. Gaetano Lisi, 2022. "Homeownership and unemployment," Economics Bulletin, AccessEcon, vol. 42(4), pages 2308-2312.
    3. Coda Moscarola, Flavia & Colombino, Ugo & Figari, Francesco & Locatelli, Marilena, 2020. "Shifting taxes away from labour enhances equity and fiscal efficiency," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 367-384.

    More about this item

    Keywords

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    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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