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Locked in by leverage: Job search during the housing crisis

Jennifer Brown and David A. Matsa

Journal of Financial Economics, 2020, vol. 136, issue 3, 623-648

Abstract: This paper examines how housing market distress affects job search. Using data from a leading online job search platform during the Great Recession, we find that job seekers in areas with depressed housing markets apply for fewer jobs that require relocation. With their search constrained geographically, job seekers broaden their search for lower-level positions nearby. These effects are stronger for job seekers with recourse mortgages, which we confirm using a spatial regression discontinuity analysis. Our findings suggest that housing market distress distorts labor market outcomes by impeding households’ ability to move.

Keywords: Housing market; Mortgage debt; Job search; Labor mobility (search for similar items in EconPapers)
JEL-codes: D14 G01 G21 J61 J64 (search for similar items in EconPapers)
Date: 2020
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Working Paper: Locked in by Leverage: Job Search during the Housing Crisis (2016) Downloads
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DOI: 10.1016/j.jfineco.2019.11.001

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