Thursday, May 9, 2013
The Washington Post reports:
The idea that owning a home makes it harder to find a job because of higher moving costs is now known as “Oswald’s hypothesis.” And it’s come in for plenty of scrutiny. Some economists, for instance, have argued that this effect might be counterbalanced by the fact that people who own homes have denser local networks, which makes it easier for them to find jobs in their local area.
Now, however, Andrew Oswald and Dartmouth’s David G. Blanchflower have a brand new working paper (pdf) suggesting that homeownership has an even bigger and wider effect on unemployment than anyone has realized. [...]
The authors find that higher levels of homeownership in a state appear to be associated with lower levels of labor mobility, higher commute times, and fewer new businesses created. Taken together, those three factors tend to increase the unemployment rate. (Why fewer new businesses? One possibility is that homeowners are more likely to use zoning to restrict the activities of firms, though that’s just a hypothesis.)