Does promoting homeownership always damage labour market performances?

Julie Beugnot (), Guy Lacroix and Olivier Charlot

No 2017-05, Working Papers from CRESE

Abstract: In this paper we analyze the link between homeownership and various aggregate and individual labour market outcomes. Our aim is to investigate the likely consequences of public policies that promote homeownership. To this end, we develop a circular firm-worker matching model with Nash wage bargaining and free market entry. Homeowners are assumed to be less mobile than tenants due to higher mobility costs mainly induced by housing market frictions. Through extensive numerical simulations, we show that: (1) Higher homeownership rates need not lead to higher unemployment rates, contrary to the so-called Oswald's hypothesis, but depends crucially on the importance of mobility costs mainly driven by housing market regulation; (2) while increased homeownership may prove harmful to some macroeconomic labour market indicators, it is always beneficial to individuals' labour market performances.

Keywords: Stochastic job matching; Homeownership; Unemployment; Mobility (search for similar items in EconPapers)
JEL-codes: H31 J61 J64 R23 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2017-03
New Economics Papers: this item is included in nep-lab and nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Does promoting homeownership always damage labour market performances? (2019)
Working Paper: Does promoting homeownership always damage labour market performances? (2019)
Working Paper: Does promoting homeownership always damage labour market performances? (2018)
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