Homeownership, Unemployment and Commuting Distances

Kantor, Yuval; Nijkamp, Peter; Rouwendal, Jan

doi:10.2139/ssrn.2327010

Cited by 8 publications

(6 citation statements)

References 15 publications

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“…Using data from the BHPS they find that home-ownership is a constraint for the employed, because they have a lower probability of gaining employment in more distant labor markets, while public renting is a constraint for the unemployed, because they are less likely to enter a distant job market compared to private renters. Finally, a recent study by Baert, Heylen, and Isebaert (2014) shows that home-owners with a mortgage have shorter unemployment durations than outright owners because of the liquidity constraints that provide strong incentives to find a job soon, while Kantor, Nijkamp, and Rouwendal (2012) provide evidence that leveraged home-owners are more likely to accept longer commuting distances.…”

Section: Previous Literaturementioning

confidence: 97%

Home-ownership, unemployed’s job search behavior and post-unemployment outcomes

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Although home-ownership has been shown to restrict geographic labor mobility and to affect job search behavior of unemployed, there is no evidence so far on how it affects their future re-employment outcomes. We use two waves of detailed German survey data of newly unemployed individuals to study the effect of home-ownership on the job search behavior of unemployed and their re-employment outcomes. We show that unemployed who own a home are less willing to move and also less likely to apply for jobs for which one would have to move. However, we do not find any evidence for compensations of their restricted mobility by more intensive (more search channels or applications) or different (more active or informal) search behavior. Furthermore, we find that home-ownership does not seem to harm the employment prospects of the unemployed. Although the re-employment probability in the short-run is slightly lower, we find that after one year home-owning unemployed have found better re-employment jobs, in terms of wages and job satisfaction, than their renting counterparts.JEL Classification: J64, J61

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Section: Previous Literaturementioning

confidence: 97%

Home-ownership, unemployed’s job search behavior and post-unemployment outcomes

2015

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“…2 Although some empirical studies provide evidence for the lock-in effect (Henley, 1998;Ferreira, Gyourko, and Tracy, 2010;Modestino and Dennett, 2013), some others do not find any support (Donovan and Schnure, 2011;Schulhofer-Wohl, 2012;Coulson and Grieco, 2013), suggesting that negative equity could even increase mobility by bearing incentives to default (Coulson and Grieco, 2013). As consistent with the argument on committed expenditures, and with the latter evidence, mortgage-holders have typically the best labor outcomes (Goss and Phillips, 1997;Flatau et al, 2003;Brunet, Clark, and Lesueur, 2007;Kantor, Nijkamp, and Rouwendal, 2013). Second, social renters face lock-in effects similarly to homeowners, due to below-market rent, long waiting lists, security of tenure, and restricted transferability within social housing (Hughes and Mc-Cormick, 1981, 1987McCormick, 1983;Flatau et al, 2003;Battu et al, 2008).…”

Section: Introductionmentioning

confidence: 95%

“…4 See Mortensen (1986) for the background of search modeling and Manning (2009) for a similar version. 5 See Kantor et al (2013) for a model with commuting.…”

Section: Theoretical Modelmentioning

confidence: 99%

The Puzzle of Job Search and Housing Tenure: A Reconciliation of Theory and Empirical Evidence

Morescalchi

2015

Journal of Regional Science

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ABSTRACT. Oswald's thesis posits that homeowners should have longer unemployment spells than renters due to restricted mobility, but repeatedly the reverse is found. I contribute to solve this puzzle analyzing both job search intensity and unemployment duration. First, I show that homeowner's mobility constraints have a negative impact on search. Theoretically, it is shown in a search model with moving costs. Using U.K. Labour Force Survey (LFS) data, it is confirmed when considering outright owners, while leveraged owners have the highest search. Second, I find evidence that homeowners select search methods associated with shorter unemployment spells, suggesting that they search more efficiently.

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“…2 Unemployed mortgagers should have greater incentives to search for a job to prevent foreclosure (Rouwendal and Nijkamp 2010). Consistently with this argument, unemployed mortgagers are found to have the shortest unemployment duration (Goss and Phillips 1997;Flatau et al 2003;Brunet et al 2007;Kantor et al 2012) as well as the highest search intensity (Morescalchi 2016).…”

Section: Literature Review and Theoretical Backgroundmentioning

confidence: 83%

Negative Home Equity and Job Mobility

Morescalchi

Veldhuizen

Voogt

et al. 2018

Data-Driven Policy Impact Evaluation

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This chapter investigates the impact of negative home equity on job mobility. Panel fixed-effects estimation is carried out by making use of a Dutch administrative data set for the period 2006–2011. Endogeneity of home equity is taken into account by considering homeowners who fall underwater because of an exogenous price decline. They are compared with homeowners with positive home equity. Negative home equity has a moderate negative effect on the probability of changing jobs. If a household plunges into negative home equity, the head of the household is about 5.2% less likely to change jobs.

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Homeownership, Unemployment and Commuting Distances

Cited by 8 publications

References 15 publications

Home-ownership, unemployed’s job search behavior and post-unemployment outcomes

Home-ownership, unemployed’s job search behavior and post-unemployment outcomes

The Puzzle of Job Search and Housing Tenure: A Reconciliation of Theory and Empirical Evidence

Negative Home Equity and Job Mobility

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