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Home ownership as a labor market friction
Author(s) -
Ringo Daniel R.
Publication year - 2021
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12309
Subject(s) - endogeneity , unemployment , preference , labour economics , work (physics) , estimation , economics , car ownership , face (sociological concept) , business , demographic economics , economic growth , microeconomics , sociology , mechanical engineering , public transport , social science , management , political science , law , engineering , econometrics
This paper estimates the effect of home ownership on individuals' unemployment. Because of higher moving costs, home owners will be less willing than renters to relocate for work and could therefore face longer unemployment spells. Estimation is complicated by the endogeneity of ownership, as owners will have different abilities, preferences, and job prospects than renters. I instrument for home ownership using a preference shifter from the worker's childhood environment. The results indicate that home ownership is a significant hindrance to mobility, and home owners suffer longer unemployment spells because of it.