Homeownership and Unemployment Duration

A. A. Taskin and F. Yaman

Working Papers from Department of Economics, City University London

Abstract: We examine the effects of homeownership on individuals' unemployment durations in the USA. We take into account that an unemployment spell can terminate with a job or with a non-participation transition. The endogeneity of homeownership is addressed through the estimation of a full maximum likelihood function which jointly models the competing hazards and the probability of being a homeowner. Unobserved factors contributing to the probability of being a homeowner are allowed to be correlated with unobservable heterogeneity in the hazard rates. We find that unemployed homeowners are less likely to find a job than renters. The effect is small but statistically significant for most specifications. The effect is stronger for outright owners and weaker for mortgage holders. We also find that outright owners have a higher and mortgage holders a lower probability of exiting to non-participation than renters.

Date: 2016
New Economics Papers: this item is included in nep-lab and nep-ure
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Citations: View citations in EconPapers (5)

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