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Unemployment Risk and the Timing of Homeownership in Japan

Author

Listed:
  • Yoko Moriizumi

    (Faculty of Economics, Kanagawa University)

  • Michio Naoi

    (Faculty of Business and Commerce, Keio University)

Abstract

The effect of unemployment risk on the timing of homeownership is examined through the use of a retrospective panel of Japanese households. We obtain the following results by applying the split population duration (SPD) model: (1) unemployment risk, as proxied by the probability of unemployment, has a significantly negative effect on homeownership and delays its timing, (2) the effect of unemployment risk is overestimated in previous studies, which assume that all households will eventually become homeowners, and (3) household characteristics as well as the conditions of housing and labour markets at the early stages of a household's life cycle play an important role in the determination of its housing purchase. Finally, our simulation results indicate that an initial one-year unemployment spell will have a fairly large impact of 1.6-year delay in the timing of a subsequent home purchase.

Suggested Citation

  • Yoko Moriizumi & Michio Naoi, 2008. "Unemployment Risk and the Timing of Homeownership in Japan," Keio/Kyoto Joint Global COE Discussion Paper Series 2008-026, Keio/Kyoto Joint Global COE Program.
    • Handle: RePEc:kei:dpaper:2008-026
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    File URL: https://ies.keio.ac.jp/old_project/old/gcoe-econbus/pdf/dp/DP2008-026.pdf
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    Cited by:

    1. Chien-Wen Yang & Fang-Ni Chu & Wan-I Chen & Ming-Chi Chen, 2022. "Willingness to Purchase a House during Economic Lost Decades in Japanese Urban Housing Market," International Real Estate Review, Global Social Science Institute, vol. 25(3), pages 333-370.
    2. Jun Nagayasu, 2021. "Life Cycles and Gender in Residential Mobility Decisions," The Journal of Real Estate Finance and Economics, Springer, vol. 62(3), pages 370-401, April.
    3. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute of Labor Economics (IZA).
    4. Meekes, Jordy & Hassink, Wolter H.J., 2019. "The role of the housing market in workers′ resilience to job displacement after firm bankruptcy," Journal of Urban Economics, Elsevier, vol. 109(C), pages 41-65.
    5. Nicholas Apergis, 2020. "Natural Disasters and Housing Prices: Fresh Evidence from a Global Country Sample," International Real Estate Review, Global Social Science Institute, vol. 23(2), pages 815-836.
    6. J. Meekes & W.H.J. Hassink, 2016. "The role of the housing market in workers’ resilience to job displacement after firm bankruptcy," Working Papers 16-10, Utrecht School of Economics.
    7. Barros, Carlos Pestana & Gil-Alana, Luis A. & Chen, Zhongfei, 2014. "The housing market in Beijing and delays in sales: A fractional polynomial survival model," Economic Modelling, Elsevier, vol. 42(C), pages 296-300.
    8. Nicholas Apergis, 2020. "Natural Disasters and Housing Prices: Fresh Evidence from a Global Country Sample," International Real Estate Review, Global Social Science Institute, vol. 23(2), pages 189-210.
    9. Jie Chen & Wei Wang & Yan Song, 2023. "Economic Potential Gain, Income Uncertainty, and Rural Migrants’ Urban Homeownership: Evidence from China," Sustainability, MDPI, vol. 15(9), pages 1-22, April.
    10. 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.

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