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Homeownership and Unemployment Duration

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  • Taskin, A. A.
  • Yaman, F.

Abstract

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

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    Blog mentions

    As found by EconAcademics.org, 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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    Cited by:

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    3. Vives Coscojuela, Cecilia, 2018. "Housing Tenure, Geographical Mobility and the Labour Market: the Role of the Employment Exit Rate," IKERLANAK 30207, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    4. Bednarzik, Robert W. & Kern, Andreas & Hisnanick, John J., 2017. "Displacement and Debt: The Role of Debt in Returning to Work in the Period Following the Great Recession," IZA Discussion Papers 10764, Institute of Labor Economics (IZA).
    5. Guler, Bulent & Taskin, Ahmet Ali, 2018. "Homeownership and unemployment: The effect of market size," Labour Economics, Elsevier, vol. 54(C), pages 191-209.

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