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Does homeownership lead to longer unemployment spells? The role of mortgage payments

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  • S. BAERT

    ()

  • F. HEYLEN

    ()

  • D. ISEBAERT

    ()

Abstract

This paper examines the impact of housing tenure choice on unemployment duration in Belgium using EU-SILC micro data. We contribute to the literature in distinguishing homeowners with mortgage payments and outright homeowners. We simultaneously estimate unemployment duration by a mixed proportional hazard model, and the probability of being an outright homeowner, a homeowner with mortgage payments or a tenant by a mixed multinomial logit model. To be able to correctly identify the causal influence of different types of housing tenure on unemployment duration, we use instrumental variables. Our results show that homeowners with a mortgage exit unemployment first. Outright owners stay unemployed the longest. Tenants take an intermediate position. Moreover, our results reveal the different share of mortgage holders within the group of homeowners as a possible explanation for the discrepancy between former contributions to this literature.

Suggested Citation

  • S. Baert & F. Heylen & D. Isebaert, 2013. "Does homeownership lead to longer unemployment spells? The role of mortgage payments," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 13/858, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:13/858
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. Beugnot, Julie & Lacroix, Guy & Charlot, Olivier, 2014. "Homeownership and Labour Market Outcomes: Micro versus Macro Performances," IZA Discussion Papers 8599, Institute for the Study of Labor (IZA).
    3. Gaetano Lisi, 2017. "Homeownership and entrepreneurship," Working Papers. Serie AD 2017-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    4. Gaetano Lisi, 2016. "Mortgage Market, Housing Tenure Choice and Unemployment," The Journal of Real Estate Finance and Economics, Springer, vol. 53(4), pages 472-493, November.
    5. Caliendo, Marco & Gielen, Anne C. & Mahlstedt, Robert, 2015. "Home-ownership, unemployed’s job search behavior and post-unemployment outcomes," Economics Letters, Elsevier, vol. 137(C), pages 218-221.
    6. Julie Beugnot & Olivier Charlot & Guy Lacroix, 2018. "Does promoting homeownership always damage labour market performances?," Cahiers de recherche 1812, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.
    7. Hana M. Broulíková & Peter Huber & Josef Montag & Petr Sunega, 2018. "Homeownership, Mobility, and Unemployment. Evidence from Housing Privatisation," WIFO Working Papers 548, WIFO.
    8. 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 for the Study of Labor (IZA).

    More about this item

    Keywords

    unemployment; housing tenure; duration analysis;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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