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Labour supply and the cost of house price booms and busts

Author

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  • Low, Hamish
  • Sánchez-Marcos, Virginia

Abstract

Fluctuations in house prices generate substantial heterogeneity in the price of purchase of similar dwellings depending on the time of purchase. These differences in the price of purchase have large effects on income-net-of-housing-costs. We document these effects using the large house price fluctuations during the recent housing boom-bust in Spain. Households can mitigate these impacts through changing labour supply. Men work more subsequent to paying higher house prices at purchase , whereas the correlation of house prices and labour supply for women is driven by selection: households where women work more, buy more expensive houses.

Suggested Citation

  • Low, Hamish & Sánchez-Marcos, Virginia, 2024. "Labour supply and the cost of house price booms and busts," Labour Economics, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:labeco:v:90:y:2024:i:c:s0927537124000861
    DOI: 10.1016/j.labeco.2024.102591
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    More about this item

    Keywords

    House price fluctuations; Labour supply; Life-cycle; Mortgage payments;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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