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Does homeownership hinder labor market activity? Evidence from housing privatization and restitution in Brno

Author

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  • Stepan Mikula

    (Masaryk University)

  • Josef Montag

    (Charles University in Prague)

Abstract

We study the effects of homeownership on labor force participation and unemployment. We exploit housing privatization and restitution after the fall of communism as a source exogenous assignment of homeowner/renter status, using a unique dataset from the city of Brno, Czech Republic. We do not find any evidence of homeownership hindering labor force participation. In fact, our estimates suggest that homeownership reduces unemployment by four to six percentage points. Homeownership appears to decrease the risk of unemployment by about one third to one half, relative to renters. The estimated effects on labor force participation are systematically around zero.

Suggested Citation

  • Stepan Mikula & Josef Montag, 2019. "Does homeownership hinder labor market activity? Evidence from housing privatization and restitution in Brno," MUNI ECON Working Papers 2019-06, Masaryk University, revised Feb 2023.
    • Handle: RePEc:mub:wpaper:2019-06
    DOI: 10.5817/WP_MUNI_ECON_2019-06
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    References listed on IDEAS

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    1. David G. Blanchflower & Andrew J. Oswald, 2013. "Does High Home-Ownership Impair the Labor Market?," NBER Working Papers 19079, National Bureau of Economic Research, Inc.
    2. Peter Huber & Josef Montag, 2020. "Homeownership, Political Participation, and Social Capital in Post‐Communist Countries and Western Europe," Kyklos, Wiley Blackwell, vol. 73(1), pages 96-119, February.
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    4. Hilber, Christian A.L. & Lyytikäinen, Teemu, 2017. "Transfer taxes and household mobility: Distortion on the housing or labor market?," Journal of Urban Economics, Elsevier, vol. 101(C), pages 57-73.
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    9. Broulíková, Hana M. & Huber, Peter & Montag, Josef & Sunega, Petr, 2020. "Homeownership, mobility, and unemployment: Evidence from housing privatization," Journal of Housing Economics, Elsevier, vol. 50(C).
    10. Georg Gebhardt, 2013. "Does Relationship Specific Investment Depend On Asset Ownership? Evidence From A Natural Experiment In The Housing Market," Journal of the European Economic Association, European Economic Association, vol. 11(1), pages 201-227, February.
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    Cited by:

    1. Broulíková, Hana M. & Huber, Peter & Montag, Josef & Sunega, Petr, 2020. "Homeownership, mobility, and unemployment: Evidence from housing privatization," Journal of Housing Economics, Elsevier, vol. 50(C).
    2. Broulíková Hana M. & Montag Josef, 2020. "Housing Privatization in Transition Countries: Institutional Features and Outcomes," Review of Economic Perspectives, Sciendo, vol. 20(1), pages 51-71, March.
    3. Huang, Naqun & Ning, Guangjie & Rong, Zhao, 2022. "Destination homeownership and labor force participation: Evidence from rural-to-urban migrants in China," Journal of Housing Economics, Elsevier, vol. 55(C).

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    More about this item

    Keywords

    homeownership; labor force participation; unemployment; housing privatization and restitution;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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