Falling House Prices and Labor Mobility: Evidence from Matched Employer-Employee Data

50 Pages Posted: 4 Sep 2013

See all articles by Christopher Goetz

Christopher Goetz

Government of the United States of America - Bureau of the Census

Date Written: August 1, 2013

Abstract

This study uses worker-level employment data from the U.S. Census Bureau to test whether falling home prices affect a worker’s propensity to take a job in a different metropolitan area from where he is currently located. Using a sample of workers from the American Community Survey, I employ a within-MSA-time estimation that compares homeowners to renters in their propensities to relocate for jobs according to data from the Longitudinal Employer Household Dynamics database. This strategy allows me to disentangle the influence of house prices from that of other time-varying, location-specific shocks. Estimates show that homeowners who have experienced declines in the nominal value of their home are approximately 20% less likely to take a new job in a location outside of the metropolitan area that they currently live and work in, relative to an equivalent renter. This evidence is consistent with the hypothesis that housing lock-in has contributed to the decreased labor mobility of homeowners during the recent housing bust.

Suggested Citation

Goetz, Christopher, Falling House Prices and Labor Mobility: Evidence from Matched Employer-Employee Data (August 1, 2013). US Census Bureau Center for Economic Studies Paper No. CES-WP- 13-43, Available at SSRN: https://ssrn.com/abstract=2320572 or http://dx.doi.org/10.2139/ssrn.2320572

Christopher Goetz (Contact Author)

Government of the United States of America - Bureau of the Census ( email )

4600 Silver Hill Road
Washington, DC 20233-9100
United States

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