Labour supply and the cost of house price booms and busts

Hamish Low and Virginia Sanchez-Marcos

Labour Economics, 2024, vol. 90, issue C

Abstract: Fluctuations in house prices generate substantial heterogeneity in the price of purchase of similar dwellings depending on the time of purchase. These differences in the price of purchase have large effects on income-net-of-housing-costs. We document these effects using the large house price fluctuations during the recent housing boom-bust in Spain. Households can mitigate these impacts through changing labour supply. Men work more subsequent to paying higher house prices at purchase , whereas the correlation of house prices and labour supply for women is driven by selection: households where women work more, buy more expensive houses.

Keywords: House price fluctuations; Labour supply; Life-cycle; Mortgage payments (search for similar items in EconPapers)
JEL-codes: D31 E32 J22 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:90:y:2024:i:c:s0927537124000861

DOI: 10.1016/j.labeco.2024.102591

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