Homeownership and Labour Market Behaviour: Interpreting the Evidence

Jan Rouwendal () and Peter Nijkamp

No 07-047/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper reviews the empirical research that has been generated by Oswald’s thesis, which claims that there is a causal relationship from homeownership to unemployment. The literature confirms a decreasing effect of homeownership on geographical mobility of workers, but does not in general confirm that homeowners have longer unemployment spells or higher unemployment rates. Even though this finding is related to heterogeneity in the labour force and associated selectivity effects, there are clear indications that there is also an effect of homeownership on the search for jobs on the local labour market, especially for highly leveraged homeowners. To offer an integrated representation of the various forces at work, this paper proposes an umbrella model with endogenous search intensity that is consistent with much of the empirical evidence. In particular, it predicts lower geographical mobility of homeowners as well as higher exit rates from unemployment by acceptance of jobs on the local labour market.

Keywords: thesis; labour market search; homeownership (search for similar items in EconPapers)
JEL-codes: J61 J64 R21 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
Date: 2007-06-18, Revised 2008-11-03
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Persistent link: http://EconPapers.repec.org/RePEc:dgr:uvatin:20070047

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