Abstract
This paper investigates the link between job satisfaction and home ownership. We explicitly focus on the effect of a transition from non-ownership to ownership on the self-reported job satisfaction scores. In other words, we concentrate on the change in job satisfaction response for individuals observed right before and after the transition. Utilizing the panel feature of the British Household Panel Survey, we find that transition to ownership reduces job satisfaction within a year following the purchase—controlling for observed variation and unobserved heterogeneity. The reduction in job satisfaction is sharper when the purchase is financed through a mortgage. We also test if this pattern persists over years. We show that the initial reduction in job satisfaction is more than doubled within 3 years after the transition for both categories of ownership. We conclude that home ownership may be a constraint for the career prospects of the employed workers, since it reduces mobility and forces them to become more dependent on the local labor market conditions. These concerns are deeper in case of a debt-financed ownership.
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Notes
Alternative views also exist in the literature. For example, van Leuvensteijn and Koning (2004) argue that lower job mobility of home owners may result from higher job commitment.
There are very few studies reporting a potentially negative correlation between home ownership and happiness scores. See Parker et al. (2011) for a recent example.
Having a very short panel justifies the use of fixed (or time-invariant) effects to control for unobserved individual-level heterogeneity.
The lock-in effect is defined as decreased mobility with increased mortgage loan-to-value ratio, particularly if the value of equity turns negative.
See Table 1 for a brief comparison of the sample means and standard deviations for these two types of ownership.
Note that the job satisfaction due to promotion prospects question is available only for the first seven waves of the BHPS.
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Acknowledgments
We thank Alex Michalos (the editor), Giovanni Peri, an anonymous referee, seminar participants at the Central Bank of the Republic of Turkey, and the participants of the EconAnadolu 2013 Conference in Eskisehir and the European Association of Labour Economists annual meeting in Turin for useful comments and suggestions. Tugba Zeydanli gratefully acknowledges financial support from the European Doctorate in Economics—Erasmus Mundus. The views expressed here are of our own and do not necessarily reflect those of the Central Bank of the Republic of Turkey. All errors are ours.
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Tumen, S., Zeydanli, T. Home Ownership and Job Satisfaction. Soc Indic Res 117, 165–177 (2014). https://doi.org/10.1007/s11205-013-0338-3
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DOI: https://doi.org/10.1007/s11205-013-0338-3