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House Prices, Wealth Effects and Labour Supply

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  • Richard Disney
  • John Gathergood

Abstract

We examine the impact of housing wealth on labour supply using exogenous local variations in house prices and household panel data for Britain. Our analysis controls for variations in local labour demand and income expectations which might co-determine house prices and labour supply. We find significant effects of house price variations on labour supply, consistent with leisure being a normal good. Labour supply is particularly sensitive to house prices among the young and older men. Our findings imply that housing wealth losses may have contributed to the unexpectedly high rates of labour market activity in Britain during the Great Recession.

Suggested Citation

  • Richard Disney & John Gathergood, 2013. "House Prices, Wealth Effects and Labour Supply," Discussion Papers 13/02, University of Nottingham, School of Economics.
  • Handle: RePEc:not:notecp:13/02
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Increasing House Values Playing Significant Role in Wealth Recovery
      by ? in St. Louis Fed On the Economy on 2014-06-30 15:00:06

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    Cited by:

    1. Costa-Font, Joan & Frank, Richard & Swartz, Katherine, 2017. "Access to long-term care after a wealth shock: evidence from the housing bubble and burst," LSE Research Online Documents on Economics 84212, London School of Economics and Political Science, LSE Library.
    2. repec:eee:socmed:v:192:y:2017:i:c:p:36-48 is not listed on IDEAS
    3. François Geerolf & Thomas Grjebine, 2014. "Assessing House Price Effects on Unemployment Dynamics," Working Papers 2014-25, CEPII research center.

    More about this item

    Keywords

    Labour supply; Wealth effects; House prices JEL codes: E51; E52; F31; F33;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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