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Homeownership and Unemployment Duration


  • Taskin, A. A.
  • Yaman, F.


We examine the effects of homeownership on individuals' unemployment durations in the USA. We take into account that an unemployment spell can terminate with a job or with a non-participation transition. The endogeneity of homeownership is addressed through the estimation of a full maximum likelihood function which jointly models the competing hazards and the probability of being a homeowner. Unobserved factors contributing to the probability of being a homeowner are allowed to be correlated with unobservable heterogeneity in the hazard rates. We find that unemployed homeowners are less likely to find a job than renters. The effect is small but statistically significant for most specifications. The effect is stronger for outright owners and weaker for mortgage holders. We also find that outright owners have a higher and mortgage holders a lower probability of exiting to non-participation than renters.

Suggested Citation

  • Taskin, A. A. & Yaman, F., 2016. "Homeownership and Unemployment Duration," Working Papers 13/04, Department of Economics, City University London.
  • Handle: RePEc:cty:dpaper:13/04

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    References listed on IDEAS

    1. David G. Blanchflower & Andrew J. Oswald, 2013. "Does High Home-Ownership Impair the Labor Market?," NBER Working Papers 19079, National Bureau of Economic Research, Inc.
    2. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
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    6. Dietz, Robert D. & Haurin, Donald R., 2003. "The social and private micro-level consequences of homeownership," Journal of Urban Economics, Elsevier, vol. 54(3), pages 401-450, November.
    7. Rupert, Peter & Wasmer, Etienne, 2012. "Housing and the labor market: Time to move and aggregate unemployment," Journal of Monetary Economics, Elsevier, vol. 59(1), pages 24-36.
    8. Bo E. Honoré, 1993. "Identification Results for Duration Models with Multiple Spells," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 241-246.
    9. Raven Molloy & Christopher L. Smith & Abigail Wozniak, 2011. "Internal Migration in the United States," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 173-196, Summer.
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    11. Oswald Andrew J., 1996. "A Conjecture on the Explanation for High Unemployment in the Industrialized Nations : Part I," The Warwick Economics Research Paper Series (TWERPS) 475, University of Warwick, Department of Economics.
    12. DiPasquale, Denise & Glaeser, Edward L., 1999. "Incentives and Social Capital: Are Homeowners Better Citizens?," Journal of Urban Economics, Elsevier, vol. 45(2), pages 354-384, March.
    13. Paul Flatau & Matt Forbes & Patric H. Hendershott, 2003. "Homeownership and Unemployment: The Roles of Leverage and Public Housing," NBER Working Papers 10021, National Bureau of Economic Research, Inc.
    14. Todd Sinai & Joseph Gyourko, 2004. "The (Un)changing Geographical Distribution of Housing Tax Benefits: 1980 to 2000," NBER Working Papers 10322, National Bureau of Economic Research, Inc.
    15. Harminder Battu & Ada Ma & Euan Phimister, 2008. "Housing Tenure, Job Mobility and Unemployment in the UK," Economic Journal, Royal Economic Society, vol. 118(527), pages 311-328, March.
    16. Carole Brunet & Jean-Yves Lesueur, 2003. "Do homeowners stay unemployed longer ? A French micro-econometric study," Post-Print halshs-00178576, HAL.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Did home ownership made things worse in the Great Recession?
      by Economic Logician in Economic Logic on 2014-01-14 22:38:00

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