Does Homeownership Lead to Longer Unemployment Spells? The Role of Mortgage Payments

Stijn Baert, Freddy Heylen and Daan Isebaert

No 7774, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the impact of housing tenure choice on unemployment duration in Belgium using EU-SILC micro data. We contribute to the literature in distinguishing homeowners with mortgage payments and outright homeowners. We simultaneously estimate unemployment duration by a mixed proportional hazard model, and the probability of being an outright homeowner, a homeowner with mortgage payments or a tenant by a mixed multinomial logit model. To be able to correctly identify the causal influence of different types of housing tenure on unemployment duration, we use instrumental variables. Our results show that homeowners with a mortgage exit unemployment first. Outright owners stay unemployed the longest. Tenants take an intermediate position. Moreover, our results reveal the different share of mortgage holders within the group of homeowners as a possible explanation for the discrepancy between former contributions to this literature.

Keywords: housing tenure; duration analysis; unemployment (search for similar items in EconPapers)
JEL-codes: C41 J64 R2 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2013-11
New Economics Papers: this item is included in nep-eur, nep-lab, nep-mac and nep-ure
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Published - revised version published in: De Economist , 2014, 152, 263 - 286

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Related works:
Journal Article: Does Homeownership Lead to Longer Unemployment Spells? The Role of Mortgage Payments (2014)
Working Paper: Does homeownership lead to longer unemployment spells? The role of mortgage payments (2013)
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