House Prices and Job Losses

Gabor Pinter

The Economic Journal, 2019, vol. 129, issue 618, 991-1013

Abstract: This article studies the strong co-movement between house prices and job losses over the UK business cycle. An aggregate SVAR and a regional proxy SVAR model are used to provide empirical evidence on the effect of house prices on labour markets. To explain the mechanism, a general equilibrium model with collateral constraints, endogenous job separation and housing shocks is estimated via Bayesian methods. I find that shocks to housing demand: (i) explain about 10–20% of output fluctuations and 20–30% of labour market fluctuations via the collateral channel; and (ii) were a major cause in triggering the 1990 and 2008 recessions.

Date: 2019
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: House prices and job losses (2015)
Working Paper: House Prices and Job Losses (2015)
Working Paper: House prices and job losses (2015)
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