Falling House Prices and Labor Mobility: Evidence from Matched Employer-Employee Data

Abstract

This study uses worker-level employment data from the U.S. Census Bureau to test whether falling home prices affect a worker's propensity to take a job in a different metropolitan area from where he is currently located. Using a sample of workers from the American Community Survey, I employ a within-MSA-time estimation that compares homeowners to renters in their propensities to relocate for jobs according to data from the Longitudinal Employer Household Dynamics database. This strategy allows me to disentangle the influence of house prices from that of other time-varying, location-specific shocks. Estimates show that homeowners who have experienced declines in the nominal value of their home are approximately 20% less likely to take a new job in a location outside of the metropolitan area that they currently live and work in, relative to an equivalent renter. This evidence is consistent with the hypothesis that housing lockin has contributed to the decreased labor mobility of homeowners during the recent housing bust.

Shifts in euro area Beveridge curves and their determinants

“…The pre-crisis proportion of workers employed in industry, finance and business and nonmarket services does not seem to have a significant effect on the position of the Beveridge curve. 23 It is well documented that homeowners are unwilling to sell their house below the price at which they bought it even if it is considered the market price-see for instance Genesove and Mayer (1997); Genesove and Mayer (2001);Ferreira et al (2010) and Goetz (2013). 24 See Appendix for financial slack results.…”

Shifts in Euro Area Beveridge Curves and Their Determinants

“…The pre-crisis proportion of workers employed in industry, finance and business and nonmarket services does not seem to have a significant effect on the position of the Beveridge curve. 23 It is well documented that homeowners are unwilling to sell their house below the price at which they bought it even if it is considered the market price-see for instance Genesove and Mayer (1997); Genesove and Mayer (2001); Ferreira et al 2010and Goetz (2013). 24 See Appendix for financial slack results.…”

House Prices, Geographical Mobility, and Unemployment

“…Ferreira et al (2012) reexamine this conclusion with recession data, and conclude that it continues to hold. Goetz (2013) …”

“…According to some of the recent contributions, technical insolvency makes homeowners 20 pct. to one-third less mobile (see Ferreira et al (2010Ferreira et al ( , 2012 and Goetz (2013)). I interpret these business cycle facts in a New Keynesian dynamic stochastic general equilibrium (DSGE) model through a novel link between labor mobility and wage setting.…”