Does Homeownership Kill Jobs?

titleA new study thinks so. WonkBlog reports:

Back in the 1990s, British economist Andrew Oswald first showed that higher levels of homeownership were correlated with higher levels of unemployment across European countries and within the United States. Other possible variables — such as unionization rates — didn’t explain the variation in joblessness nearly as well. The idea that owning a home makes it harder to find a job because of higher moving costs is now known as “Oswald’s hypothesis.” And it’s come in for plenty of scrutiny. Some economists, for instance, have argued that this effect might be counterbalanced by the fact that people who own homes have denser local networks, which makes it easier for them to find jobs in their local area.

So what’s the study say>

We find that rises in the home-ownership rate in a US state are a precursor to eventual sharp rises in unemployment in that state. A doubling of the rate of home-ownership in a US state is followed in the long-run by more than a doubling of the later unemployment rate.

It has to do with lower mobility, longer commute times, and fewer new businesses. See the link above for all the details.

One Comment

one eye

I find the complete opposite true here in phoenix. of course, Arizona has it;s unique ways;Not letting people buy homes has created an increasingly unstable homeless population. Those people with skills and common sense are fleeing in droves this summer 2013 (noted by moving vans and mattress heavy pick up trucks) whole parts of the city abandon, art community and hipsters disappearing. No giving people cheap housing increases property values?, look at nyc, they have figured it out. You have it ass backwards it is just common sense, which is not so common now a days…………

Leave a Reply

Your email address will not be published. Required fields are marked *