The impact of housing market institutions on labour mobility; a European cross-country comparison

Thomas de Graaff () and Michiel Van Leuvensteijn ()

CPB Discussion Papers from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: In this paper, we study the effects of housing market institutions on labour mobility. We construct durations for individuals leaving their current job for a different job, becoming unemployed or leaving the labour market, from a sample of households from 14 European countries in 1994–2001. We merge this data with country specific housing market institutions, such as transaction taxes, and language and religion diversity. Similar to previous studies, estimated hazards indicate that home-ownership reduces job-to-job mobility as well as the probability to become unemployed or economically inactive on a individual level. However, a comparison between countries reveals that countries with high levels of homeownership rates also have high levels of unemployment. Therefore, this paper is able to reconcile the seemingly contrasting empirical results from both the macroeconomic and the microeconomic level.

Keywords: housing market; transaction costs; labor mobility; unemployment (search for similar items in EconPapers)
JEL-codes: J60 J61 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-geo, nep-lab and nep-ure
Date: 2007-06
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Persistent link: http://EconPapers.repec.org/RePEc:cpb:discus:82

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