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Homeownership and Labour Market Outcomes: Micro versus Macro Performances

Listed author(s):
  • Beugnot, Julie

    ()

    (Université de Franche Comté)

  • Lacroix, Guy

    ()

    (Université Laval)

  • Charlot, Olivier

    ()

    (University of Cergy-Pontoise)

In this paper we investigate Oswald's hypothesis according to which higher homeownership rates increase aggregate unemployment rates. To this end, we develop a matching model à la Pissarides (2000) in which homeowners are assumed to be less mobile than tenants. Based on numerical simulations, we analyze both macroeconomic and microeconomic labour market outcomes following an (exogenous) increase in homeownership rates. We show that (1) Oswald's hypothesis does not always hold as it depends crucially on the importance of mobility costs; (2) while higher homeownership may harm macroeconomic labour market performances, individual performances always improve following an increase in homeownership rates.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8599.

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Length: 28 pages
Date of creation: Oct 2014
Handle: RePEc:iza:izadps:dp8599
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  1. Belot, Michele & van Ours, Jan C., 2001. "Unemployment and Labor Market Institutions: An Empirical Analysis," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 403-418, December.
  2. Stijn Baert & Freddy Heylen & Daan Isebaert, 2014. "Does Homeownership Lead to Longer Unemployment Spells? The Role of Mortgage Payments," De Economist, Springer, vol. 162(3), pages 263-286, September.
  3. Jakob Roland Munch & Michael Rosholm & Michael Svarer, 2006. "Are Homeowners Really More Unemployed?," Economic Journal, Royal Economic Society, vol. 116(514), pages 991-1013, October.
  4. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
  5. 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.
  6. Nathalie Havet & Alexis Penot, 2010. "Does Homeownership Harm Labour Market Performances? A Survey," Working Papers 1012, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
  7. Dohmen, Thomas J., 2005. "Housing, mobility and unemployment," Regional Science and Urban Economics, Elsevier, vol. 35(3), pages 305-325, May.
  8. Coulson, N. Edward & Fisher, Lynn M., 2009. "Housing tenure and labor market impacts: The search goes on," Journal of Urban Economics, Elsevier, vol. 65(3), pages 252-264, May.
  9. Laurent Gobillon, 2001. "Emploi, logement et mobilité résidentielle," Économie et Statistique, Programme National Persée, vol. 349(1), pages 77-98.
  10. 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.
  11. Smith, Lawrence B & Rosen, Kenneth T & Fallis, George, 1988. "Recent Developments in Economic Models of Housing Markets," Journal of Economic Literature, American Economic Association, vol. 26(1), pages 29-64, March.
  12. Aico van Vuuren & Michiel van Leuvensteijn, 2007. "The impact of homeownership on unemployment in the Netherlands," CPB Discussion Paper 86, CPB Netherlands Bureau for Economic Policy Analysis.
  13. Henley, Andrew, 1998. "Residential Mobility, Housing Equity and the Labour Market," Economic Journal, Royal Economic Society, vol. 108(447), pages 414-427, March.
  14. Dan Andrews & Aida Caldera Sánchez, 2011. "The Evolution of Homeownership Rates in Selected OECD Countries: Demographic and Public Policy Influences," OECD Journal: Economic Studies, OECD Publishing, vol. 2011(1), pages 1-37.
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