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The Puzzle of Job Search and Housing Tenure: a Reconciliation of Theory and Empirical Evidence

Morescalchi, Andrea The Puzzle of Job Search and Housing Tenure: a Reconciliation of Theory and Empirical Evidence. In: XXV National Conference of Labour Economics, 15-16 September 2011, Università Cattolica del Sacro Cuore, Milano pp. 1-41. (Unpublished) (2011)

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This paper attempts to reconcile the empirical evidence with the argument in favour of a positive effect of homeownership on exit rates from unemployment, known as \Oswald's thesis". While the theory would suggest that homeowners experience more difficulties than renters to exit unemployment due to lower residential mobility, the empirical literature has typically found lower unemployed duration for homeowners. Taking into account some of the reasons for the falsification of the Oswald's thesis, we provide evidence which supports it. At first, in a theoretical model of endogenous job search we show that homeowners' higher moving costs imply unambiguously lower search and lower job finding rates, even though an opposite effect works for jobs which do not require a move. Then, in the empirical analysis we make use of data drawn from the British Household Panel Survey to compare job search intensity measures by housing tenure. We find that, controlling for housing costs and for different residential statuses, non-employed outright owners have definitely a lower attachment to the labour market than renters, and that this effect is even more evident when we compare them to private renters.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: JEL Classification: J61, J64, R2. Keywords: Job Search, Housing Tenure, Oswald Effect.
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Research Area: Economics and Institutional Change
Depositing User: Ms T. Iannizzi
Date Deposited: 20 Feb 2013 09:41
Last Modified: 20 Feb 2013 09:41
URI: http://eprints.imtlucca.it/id/eprint/1484

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