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Home Ownership and Unemployment in the U.S

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  • Richard K. Green
  • Patric H. Hendershott

Abstract

In this paper, we scrutinise Oswald's evidence that home-ownership and unemployment are correlated across the US states. In order to abstract from state fixed-effects in levels, we analyse the cross-sectional variation in changes in home-ownership and unemployment rates between 1970 and 1990. After duplicating (nearly) Oswald's result, we illustrate the importance of weighting the state observations by the fraction of total US households in 1970 that resided in the respective states and of abstracting from the ageing of the population between 1970 and 1990: this causes Oswald's correlation to to disappear. Secondly, we estimate the relationship for six different age-classes and for household heads and total population. We find that the relationship is non-existent for both young households and old households, but exists for middle-aged households. Young households have accumulated little wealth and have had less time to become attached to the geographical area than middle-aged households and thus are more likely to respond to unemployment by relocating. Older households' employment cannot be greatly affected by home-ownership because their members are largely not in the labour force. Unemployment rates of household heads are affected less by tenure than those of the population as a whole.
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Suggested Citation

  • Richard K. Green & Patric H. Hendershott, 1999. "Home Ownership and Unemployment in the U.S," Wisconsin-Madison CULER working papers 99-15, University of Wisconsin Center for Urban Land Economic Research.
  • Handle: RePEc:wop:wisule:99-15
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    File URL: http://www.bus.wisc.edu/realestate/pdf/pdf/9912.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Andrea Morescalchi, 2016. "The Puzzle Of Job Search And Housing Tenure: A Reconciliation Of Theory And Empirical Evidence," Journal of Regional Science, Wiley Blackwell, vol. 56(2), pages 288-312, March.
    2. Carole Brunet & Jean-Yves Lesueur, 2004. "Le statut résidentiel affecte-t-il la durée de chômage ?. Une estimation micro-économétrique sur données françaises," Revue économique, Presses de Sciences-Po, vol. 55(3), pages 569-578.
    3. Munch, Jakob Roland & Rosholm, Michael & Svarer, Michael, 2008. "Home ownership, job duration, and wages," Journal of Urban Economics, Elsevier, vol. 63(1), pages 130-145, January.
    4. Andrea Bassanini & Romain Duval, 2006. "The Determinants of Unemployment across OECD Countries," Post-Print halshs-00120584, HAL.
    5. François Ortalo-Magné & Sven Rady, "undated". "Homeownership: Volatile Housing Prices, Low Labor Mobility and High Income Dispersion," Wisconsin-Madison CULER working papers 02-04, University of Wisconsin Center for Urban Land Economic Research.
    6. Nathalie Havet & Carole Brunet, 2009. "Propriété immobilière et déqualifications dans l'emploi," Revue Française d'Économie, Programme National Persée, vol. 24(1), pages 121-155.
    7. Allen Head & Huw Lloyd-Ellis, 2012. "Housing Liquidity, Mobility, and the Labour Market," Review of Economic Studies, Oxford University Press, vol. 79(4), pages 1559-1589.
    8. Bloze, Gintautas & Skak, Morten, 2016. "Housing equity, residential mobility and commuting," Journal of Urban Economics, Elsevier, vol. 96(C), pages 156-165.
    9. Daan Isebaert & Freddy Heylen & Carine Smolders, 2015. "Houses and/or Jobs: Ownership and the Labour Market in Belgian Districts," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1387-1406, August.
    10. Laura Kawano & Sara LaLumia, 2017. "How Income Changes During Unemployment: Evidence from Tax Return Data," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 418-456.
    11. Laamanen, Jani-Petri, 2017. "Home-ownership and the Labour Market: Evidence from Rental Housing Market Deregulation," Labour Economics, Elsevier, vol. 48(C), pages 157-167.
    12. Namkee Ahn & Maite Blázquez, 2007. "Residential Mobility and Labor Market Transitions: Relative Effects of Housing Tenure, Satisfaction and Other Variables," Working Papers 2007-05, FEDEA.
    13. 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.
    14. Michiel van Leuvensteijn & Pierre Koning, 2006. "The Effect of Home-Ownership on Labour Mobility in the Netherlands," Chapters,in: Labour Market Adjustments in Europe, chapter 6 Edward Elgar Publishing.
    15. Beth Wilson & E. Helen Berry & Michael Toney & Young-Taek Kim & John Cromartie, 2009. "A Panel Based Analysis of the Effects of Race/Ethnicity and Other Individual Level Characteristics at Leaving on Returning," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 28(4), pages 405-428, August.
    16. Paul Flatau & Matt Forbes & Patric H. Hendershott, 2003. "Homeownership and Unemployment: The Roles of Leverage and Public Housing," NBER Working Papers 10021, National Bureau of Economic Research, Inc.
    17. Gary Engelhardt, 2001. "Nominal Loss Aversion, Housing Equity Constraints, and Household Mobility: Evidence from the United States," Center for Policy Research Working Papers 42, Center for Policy Research, Maxwell School, Syracuse University.
    18. repec:wil:wileco:2012-10 is not listed on IDEAS
    19. Martin Lux & Petr Sunega, 2012. "Labour Mobility and Housing," Urban Studies, Urban Studies Journal Limited, vol. 49(3), pages 489-504, February.

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