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The heterogeneous impact of labor market shifts on household mortgage-taking

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  • Cantarella, Michele
  • Kavonius, Ilja Kristian

Abstract

This paper examines how structural change in labor markets affects household credit outcomes. Using a Shift-Share instrumental variable approach, we find that occupational shifts negatively influence mortgage holding for households facing fa-vorable job market conditions, such as stable employment and income growth. Our results, robust to alternative specifications, suggest that when both individual and economy-wide career prospects are favorable, the opportunity costs of settling down grow accordingly. JEL Classification: G51, J24, D84, O15

Suggested Citation

  • Cantarella, Michele & Kavonius, Ilja Kristian, 2025. "The heterogeneous impact of labor market shifts on household mortgage-taking," Working Paper Series 3109, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20253109
    Note: 374170
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    References listed on IDEAS

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    1. Jack Favilukis & Xiaoji Lin & Xiaofei Zhao, 2020. "The Elephant in the Room: The Impact of Labor Obligations on Credit Markets," American Economic Review, American Economic Association, vol. 110(6), pages 1673-1712, June.
    2. Maarten Goos & Alan Manning & Anna Salomons, 2009. "Job Polarization in Europe," American Economic Review, American Economic Association, vol. 99(2), pages 58-63, May.
    3. Autor, David H., 2013. "The "task approach" to labor markets : an overview," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(3), pages 185-199.
    4. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    5. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    6. Benjamin J. Keys, 2018. "The Credit Market Consequences of Job Displacement," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 405-415, July.
    7. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1279-1333.
    8. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    9. Olivier Coibion & Yuriy Gorodnichenko & Marianna Kudlyak & John Mondragon, 2020. "Greater Inequality and Household Borrowing: New Evidence from Household Data," Journal of the European Economic Association, European Economic Association, vol. 18(6), pages 2922-2971.
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    11. repec:cdl:econwp:qt9bn4w75j is not listed on IDEAS
    12. Michele Cantarella & Ilja Kristian Kavonius, 2024. "Job polarisation and household borrowing," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 22(4), pages 959-980, December.
    13. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue nov.
    14. Shang, Longfei & Saffar, Walid, 2023. "Employment Protection and Household Mortgage Debt," Journal of Banking & Finance, Elsevier, vol. 149(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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