Homeownership, mortgages, and unemployment

Y. Kantor, J.L. Mohlmann, P. Nijkamp, J. Rouwendal

Research output: Contribution to JournalArticleAcademicpeer-review


According to Oswald’s thesis, homeownership increases unemployment. Empirical research on micro-data has indeed confirmed that unemployed homeowners are less inclined to change their residential location and accept a new job elsewhere. However, it is also repeatedly found that unemployed homeowners tend to find a job more easily than otherwise comparable tenants. This paper aims to make a new contribution to the scientific debate on Oswald’s thesis by addressing the risk attitudes of job seekers. We show that decreasing absolute risk aversion implies that the exit rate from unemployment is increasing in housing costs, in the context of a standard job search model. Therefore, the higher costs associated with leveraged homeownership may be the driving force of homeowners’ observed labor market performance. We test this prediction on the basis of Dutch data on individual unemployment spells. Contrary to our hypothesis, we do not find evidence that a higher mortgage is associated with higher exit rates from unemployment. Rather, our findings support earlier micro-econometric results that homeownership tends to accelerate a successful job search.
Original languageEnglish
Pages (from-to)253-265
JournalLetters in Spatial and Resource Sciences
Issue number3
Publication statusPublished - 2015


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