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Moving to a Job: The Role of Home Equity, Debt, and Access to Credit

Yuliya Demyanyk (), Dmytro Hryshko, Maria Luengo-Prado () and Bent Sorensen

American Economic Journal: Macroeconomics, 2017, vol. 9, issue 2, 149-81

Abstract: We use individual-level credit reports merged with loan-level mortgage data to estimate how home equity interacted with mobility in relatively weak and strong labor markets in the United States during the Great Recession. We construct a dynamic model of housing, consumption, employment, and relocation, which provides a structural interpretation of our empirical results and allows us to explore the role that foreclosure played in labor mobility. We find that negative home equity is not a significant barrier to job-related mobility because the benefits of accepting an out-of-area job outweigh the costs of moving. This pattern holds even if homeowners are not able to default on their mortgages.

JEL-codes: D14 G01 J61 R23 R31 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/mac.20130326
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Working Paper: Moving to a Job: The Role of Home Equity, Debt, and Access to Credit (2013) Downloads
Working Paper: Moving to a job: The role of home equity, debt, and access to credit (2013) Downloads
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Handle: RePEc:aea:aejmac:v:9:y:2017:i:2:p:149-81