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Homeownerhip and entrepreneurship

Philippe Bracke, Christian Hilber () and Olmo Silva ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study the link between homeownership and entrepreneurship by exploiting the longitudinal dimension of the British Household Panel Survey (BHPS) and constructing a detailed monthly-spell dataset that tracks individuals‟ job history and tenure choice, coupled with other time-varying characteristics. Our fixed-effects estimates show that purchasing a house reduces the likelihood of starting a business by 20-25%. This result is driven by homeowners with mortgages and persists for several years after entering homeownership. The negative link can be rationalized by portfolio considerations: leveraged housing investments crowd out entrepreneurial investments. Alternative explanations based on credit constraints find little support in our data.

Keywords: entrepreneurship; homeownership; panel estimation (search for similar items in EconPapers)
JEL-codes: D14 G11 L20 R21 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2012-04
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http://eprints.lse.ac.uk/58436/ Open access version. (application/pdf)

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Working Paper: Homeownerhip and Entrepreneurship (2012) Downloads
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