Homeownership, mobility, and unemployment: Evidence from housing privatization

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

*Corresponding author for this work

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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

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.

FundersFunder 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 Republiky15-17810S

    Keywords

    • Homeownership
    • Housing privatization
    • Mobility
    • Unemployment

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