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 language | English |
|---|---|
| Article number | 101728 |
| Pages (from-to) | 1-18 |
| Number of pages | 18 |
| Journal | Journal of Housing Economics |
| Volume | 50 |
| Early online date | 8 Aug 2020 |
| DOIs | |
| Publication status | Published - Dec 2020 |
Funding
Financial support from the Czech Science Foundation , grant no. 15-17810S , is gratefully acknowledged. We thank the following people for their helpful comments: two anonymous reviewers, editor Raven Molloy, Mehmet Baç, Martin Guzi, Zsófi Kömüves, Štěpán Mikula, participants at the 2017 conference of the Society for Institutional and Organizational Economics at Columbia University, the 2017 conference of the Public Choice Society, the 2017 conference of the German Law and Economics Association at Marburg University, the 2016 conference of the European Association of Law and Economics at Bologna University, the 2016 conference of the European Association for Comparative Economic Studies at the University of Regensburg, the 2016 Prague Conference on Political Economy at Cevro Institute, the 2016 Young Economists Meeting at Masaryk University, and workshop participants at University of Bern, RWI Essen, and Kazakh-British Technical University. The usual disclaimer applies. The replication code producing the results reported in this paper is available at https://sites.google.com/site/josefmontag or upon request. Financial support from the Czech Science Foundation, grant no. 15-17810S, is gratefully acknowledged. We thank the following people for their helpful comments: two anonymous reviewers, editor Raven Molloy, Mehmet Ba?, Martin Guzi, Zs?fi K?m?ves, ?t?p?n Mikula, participants at the 2017 conference of the Society for Institutional and Organizational Economics at Columbia University, the 2017 conference of the Public Choice Society, the 2017 conference of the German Law and Economics Association at Marburg University, the 2016 conference of the European Association of Law and Economics at Bologna University, the 2016 conference of the European Association for Comparative Economic Studies at the University of Regensburg, the 2016 Prague Conference on Political Economy at Cevro Institute, the 2016 Young Economists Meeting at Masaryk University, and workshop participants at University of Bern, RWI Essen, and Kazakh-British Technical University. The usual disclaimer applies. The replication code producing the results reported in this paper is available at https://sites.google.com/site/josefmontag or upon request.
| Funders | Funder number |
|---|---|
| Cevro Institute | |
| Economics Association | |
| European Association for Comparative Economic Studies at the University of Regensburg | |
| European Association of Law and Economics at Bologna University | |
| Kazakh-British Technical University | |
| Marburg University | |
| Public Choice Society | |
| RWI Essen | |
| Grantová Agentura České Republiky | 15-17810S |
Keywords
- Homeownership
- Housing privatization
- Mobility
- Unemployment
