The housing boom and selection into entrepreneurship

Joao Galindo da Fonseca and Pierluca Pannella

Labour Economics, 2023, vol. 85, issue C

Abstract: Existing evidence shows that increases in property prices produce immediate positive effects on economic activity and, particularly, on business creation. In this paper, we ask the following question: how does a housing boom alter the selection of individuals that open a firm? The answer to this question is important to understand how robust and long-lasting is the positive effect of a housing shock. We find that the early 2000 US housing boom increased entry into entrepreneurship mostly for lower ability house-owners. We derive our results using IQ scores and an indirect measure of ability constructed from individuals’ wage history.

Keywords: Housing boom; Entrepreneurship and selection (search for similar items in EconPapers)
JEL-codes: E23 G3 J24 L26 (search for similar items in EconPapers)
Date: 2023
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Working Paper: The housing boom and selection into entrepreneurship (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:85:y:2023:i:c:s0927537123001331

DOI: 10.1016/j.labeco.2023.102458

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