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Housing market regulation and the social demand for job protection

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  • Decreuse, Bruno
  • van Ypersele, Tanguy

Abstract

Controlling for country fixed effects, there is a positive and statistically significant relationship between the degree of housing market regulation (HMR) and the strictness of employment protection legislation (EPL) in OECD countries. We provide a model in which HMR increases foreclosure costs in case of mortgage default, while EPL raises the administrative cost of dismissal. Owing to banks' lending behavior, individuals' demand for job protection increases with the cost of foreclosure. We use the model to discuss social housing and family insurance, the case for mortgage unemployment insurance, the impact of min down-payment policies, regulations on the use of fixed-term contracts, the failure of a 2006 French reform of labor contracts, and feed-back effects from HMR to EPL.

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  • Decreuse, Bruno & van Ypersele, Tanguy, 2011. "Housing market regulation and the social demand for job protection," Journal of Public Economics, Elsevier, vol. 95(11), pages 1397-1409.
    • Handle: RePEc:eee:pubeco:v:95:y:2011:i:11:p:1397-1409
    DOI: 10.1016/j.jpubeco.2011.06.001
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    Cited by:

    1. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    2. Antoine Bonleu & Bruno Decreuse & Tanguy van Ypersele, 2019. "Job protection, housing market regulation, and the youth," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(6), pages 1017-1036, December.
    3. Antoine Bonleu, 2019. "Procedural Formalism and Social Networks in the Housing Market," Annals of Economics and Statistics, GENES, issue 133, pages 25-56.
    4. Antoine Bonleu, 2017. "Sun, Regulation and Local Social Networks," Working Papers halshs-01502604, HAL.
    5. repec:spo:wpmain:info:hdl:2441/8812 is not listed on IDEAS
    6. Estache, Antonio & Foucart, Renaud, 2021. "On the political economy of industrial, labor and social reforms as complements," European Economic Review, Elsevier, vol. 137(C).
    7. repec:hal:spmain:info:hdl:2441/8812 is not listed on IDEAS
    8. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.

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    More about this item

    Keywords

    Foreclosure costs; Job protection; Fixed-term contracts; CPE;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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