Homeownership And Unemployment: Outcomes And Implications

This dissertation consists of three papers on the effect of homeownership on labor market outcomes. In the first paper, I developed a one-sector two-region endogenous job search model and show that when jobs arrive from both local labor market and non-local labor market, homeowners: are less likely to be unemployed than renters; and have higher overall search intensity and exit rate than renters. I then estimate the effect of homeownership on unemployment using a panel data set aggregated from the American Community Survey data from 2003 to 2011 and use relative cost of owning a home as instrument for homeownership. I also estimate models at the individual level. Regression results show that homeownership is negatively and significantly related to unemployment confirming the theoretical predictions. These results are robust to different estimation methods and specifications. The second paper evaluates the effect of homeownership on unemployment spell using the March Current Population Survey (CPS) data 1990 to 2013. Using duration models, I find that when transition from unemployment to different types of employment (full time and part-time) is ignored, homeownership decreases the probability of exiting unemployment. However, when the transition to different types of employment is considered, homeowners compared to renters have a lower probability of exit into full-time employment but have a higher probability of exit into part-time employment. Results from competing risk models when the transition into full-time and part-time employments are modeled simultaneously also exhibit similar patterns. The final paper investigates job search intensity by unemployed homeowners and renters in the US using the American Time Use Survey (ATUS) data from 2003 to 2013. I use Ordinary Least Squares and two-limit Tobit methods to estimate my models. The findings from regression results across different specifications of the two models estimated using the full sample shows that, on average, homeowners search for jobs less intensively compared to renters. However, when the sample is disaggregated into different unemployed groups, I find that while job losers and temporary layoff homeowners search for jobs more intensively than renters, homeowners who are re-entrant and job leavers search for jobs less intensively than renters