Housing market regulation and the social demand for job protection

Bruno Decreuse and Tanguy van Ypersele

Journal of Public Economics, 2011, vol. 95, issue 11, 1397-1409

Abstract: Controlling for country fixed effects, there is a positive and statistically significant relationship between the degree of housing market regulation (HMR) and the strictness of employment protection legislation (EPL) in OECD countries. We provide a model in which HMR increases foreclosure costs in case of mortgage default, while EPL raises the administrative cost of dismissal. Owing to banks' lending behavior, individuals' demand for job protection increases with the cost of foreclosure. We use the model to discuss social housing and family insurance, the case for mortgage unemployment insurance, the impact of min down-payment policies, regulations on the use of fixed-term contracts, the failure of a 2006 French reform of labor contracts, and feed-back effects from HMR to EPL.

Keywords: Foreclosure costs; Job protection; Fixed-term contracts; CPE (search for similar items in EconPapers)
JEL-codes: G2 K31 R2 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (10)

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Working Paper: Housing market regulation and the social demand for job protection (2010)
Working Paper: Housing market regulation and the social demand for job protection (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:95:y:2011:i:11:p:1397-1409

DOI: 10.1016/j.jpubeco.2011.06.001

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