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Job loss risk, expected mobility, and home ownership

Matthew J. Botsch and Stephen D. Morris

Journal of Housing Economics, 2021, vol. 53, issue C

Abstract: Geographic mobility is a key factor affecting the home purchase decision, and a common reason for moving is to find work. Yet, little is known regarding how job loss risk affects home ownership via the mobility channel. Measuring this effect is difficult because job loss risk usually coincides with income and credit shocks. We isolate the mobility channel by studying economics professors on the tenure track. Our analysis uses public records to provide the first quantitative estimates of this effect, and we validate our results with a follow-up survey. A one percentage point increase in expected mobility, identified via variation in tenure risk, reduces the probability of home ownership by up to 1.8 percentage points.

Keywords: Home ownership; Rent/buy decision; Geographic mobility; Labor market search (search for similar items in EconPapers)
JEL-codes: J61 J64 R21 R31 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jhe.2020.101733

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