Homeownership and entrepreneurship

Gaetano Lisi

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: Housing costs can damage labour market outcomes and increase unemployment. Also, an important and related research stream claims that higher homeownership rates are associated with fewer new businesses. Using a search-matching model, this paper investigates the relation between homeownership and entrepreneurship by distinguishing two channels through which homeownership affects the creation of enterprises and jobs. The first channel looks at the job search intensity of homeowners, while the second considers the link between the benefit of being a homeowner and the productivity of a new enterprise. The key result of this paper is that the intrinsic preference for homeownership plays a key role in the establishment of new small businesses, while in general homeownership does not encourage the development of existing enterprises.

Keywords: entrepreneurship; homeownership; job creation; new firms; small businesses. (search for similar items in EconPapers)
JEL-codes: J63 J64 L26 M13 R21 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2017-02
New Economics Papers: this item is included in nep-dge, nep-ent, nep-ino and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2017-01

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