Abstract
This theoretical paper develops a simple extension of the standard search and matching model that aims at clarifying the effects of housing tenure on labour market outcomes. Indeed, at the microeconomic level, employment status affects housing tenure choice, since the employed have more possibility of buying a home with respect to the unemployed. Instead, at the macroeconomic level, the relation is more complex and interesting to investigate, since it involves aggregate and indirect effects. The main novelty of this analysis is that the combination of the various forms of housing tenure status and employment status of individuals is crucial in deriving the actual effect of a specific housing tenure on vacancies and unemployment.
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