De Economist

, Volume 162, Issue 3, pp 263–286 | Cite as

Does Homeownership Lead to Longer Unemployment Spells? The Role of Mortgage Payments

Article

Abstract

This paper examines the impact of housing tenure choice on unemployment duration in Belgium using EU-SILC micro data. We contribute to the literature in distinguishing homeowners with mortgage payments and outright homeowners. Accounting for tenure endogeneity and unobserved heterogeneity, we find that homeowners with a mortgage exit unemployment first, while outright owners stay unemployed the longest. Tenants take an intermediate position. Our results emphasize the key role of housing costs in the link between housing tenure and labour market outcomes. Considered together with the results of recent macroeconomic research on housing and employment in Belgium, this paper provides indirect evidence for significant negative effects of homeownership on the labour market and the economy beyond the owners themselves.

Keywords

Unemployment Housing tenure Duration analysis 

JEL Classification

C41 J64 R2 

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Sherppa, Ghent UniversityGhentBelgium
  2. 2.IZABonnGermany

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