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

Author

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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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    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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