Homeownership, mobility, and unemployment: Evidence from housing privatization

Hana M. Broulíková, Peter Huber, Josef Montag*, Petr Sunega

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Homeownership is believed to cause higher unemployment. This is because homeowners face higher mobility costs that limit their job search to local labor markets. Empirical tests of this prediction have yielded mixed results so far, possibly due to the endogeneity of homeownership. This paper proposes that the privatization of public housing in Central and Eastern Europe after the fall of the Iron Curtain was a substantial policy shock that generated largely exogenous assignment of homeownership to individual households. This facilitates a new test of the effects of homeownership on mobility and unemployment: First, our empirical results do not reject that homeownership reduces mobility. Second, our results are inconsistent with homeownership increasing unemployment.

Original languageEnglish
Article number101728
Pages (from-to)1-18
Number of pages18
JournalJournal of Housing Economics
Volume50
Early online date8 Aug 2020
DOIs
Publication statusPublished - Dec 2020

Keywords

  • Homeownership
  • Housing privatization
  • Mobility
  • Unemployment

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