Housing, Mobility, and Unemployment*

Abstract

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. Terms of use: Documents in Housing, Mobility and UnemploymentThomas J. Dohmen 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 limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. 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. The current research program deals with (1) mobility and flexibility of labor markets, (2) internationalization of labor markets and European integration, (3) the welfare state and labor markets, (4) labor markets in transition, (5) the future of work, (6) project evaluation and (7) general labor economics. 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. This paper develops a model that shows why high-skilled workers move more and are therefore unemployed less than low-skilled workers. The model can explain the paradoxical empirical regularity that higher owner-occupation rates are associated with higher levels of unemployment although home-owners tend to be unemployed less. The choice of housing tenure affects moving costs and thereby regional mobility and unemployment. The paper analyzes the impact of symmetric and asymmetric shocks on mobility and unemployment, and discusses effects of government intervention in the housing market. In addition, it is shown that moving costs reduce job search effort and search effectiveness.

Houses and/or Jobs: Ownership and the Labour Market in Belgian Districts

“…Dohmen (2005) basically confirms Oswald's results but emphasizes the role of education and skills. Workers only move to another region in Dohmen's model when the wage in that region exceeds the unemployment benefit and the cost of changing location.…”

“…This study also indicates Belgium as a country with very high transaction costs of buying and selling houses. Dohmen (2005). This result is statistically significant at 6%.…”

“…Finally, Equation (2) includes the skill level of the population (Schooling it ) and a number of demographic variables (DemE jit ). Schooling captures the idea raised by Dohmen (2005). For a given share of owners in a district, overall mobility of the population and expected employment rates will rise the higher skill levels.…”

Does High Home-Ownership Impair the Labor Market?

“…Hence --though the empirical debate continues --a number of authors concluded that Oswald's general idea must be incorrect and the cross-country pattern must be illusory. A modern literature includes Battu et al (2008), Fisher (2002, 2009), Dohmen (2005), Head and Lloyd-Ellis (2012), Van Leuvensteijn and Koning (2004), Munch et al (2006), Rouwendal and Nijkamp (2010), Smith and Zenou (2003), and Zabel (2012).…”

“…As a fourth possibility, a formal model in the literature by Dohmen (2005) predicts that high ownership can be associated with high unemployment. The reason, within Dohmen's framework, is not one linked to an externality but instead to the fact that the composition of the unemployed pool is endogenous to the structure of the housing market (in other words, the kind of person who is effect on migration rates, then a migration cost arises which will and should influence migration and hence unemployment rates, without necessarily doing 'bad things'.…”