Abstract
Housing stock is one of the most important components of household wealth in the U.S. Public policy has vigorously promoted home ownership based on the belief that it strengthens the individual’s commitment and contribution to the community. Yet it is possible that this social goal generates unanticipated consequences in the labor market. This study examines potential labor market influences of home ownership, focusing on the length of unemployment. Using a sample of unemployed workers from the 1986 Panel Study of Income Dynamics, this study concludes that for some unemployed, home ownership significantly reduces unemployment duration. This appears to occur through two channels. First, the burden of monthly mortgage payments stimulates more vigorous job search, and second, home equity aids job search through a wealth effect.
Highlights
Housing stock is one of the most important components of wealth in the United States
The purpose of this study is to investigate the impact of housing status on the duration of unemployment in the U.S Does the prominence of housing in the wealth portfolio have any implications for the U.S . labor market? For example, McCormick (1983) showed that home ownership had a significant impact on employment status in Great Britain
While we have identified several channels by which home ownership may influence labor market outcomes, there is the obvious concern that home ownership may be reflecting some unobserved characteristics that affect the success of job search
Summary
Housing stock is one of the most important components of wealth in the United States. Public policy has vigorously promoted home ownership based on the belief that it strengthens the individual's commitment and contribution to the community. Given the extensive public policy focus on housing, it is important that policymakers be cognizant of how housing status affects economic status via labor market outcomes, including the length of unemployment spells. Identification of the causes of this variation is important for the development and implementation of government labor market policies. Many studies have focused on the impact of unemployment insurance and other government transfer payments on the length of job search (Feldstein 1975; Marston 1975; Ehrenberg and Oaxaca 1976; Meyer 1990). Other studies have addressed the role of individual worker characteristics such as age, education, health, geographic mobility, and marital status to explain observed dif-
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
