Working Paper: NBER ID: w16701
Authors: Sam Schulhofer-Wohl
Abstract: Some commentators have argued that the housing crisis may harm labor markets because homeowners who owe more than their homes are worth are less likely to move to places that have productive job opportunities. I show that, in the available data, negative equity does not make homeowners less mobile. In fact, homeowners who have negative equity are slightly more likely to move than homeowners who have positive equity. Ferreira, Gyourko and Tracy's (2010) contrasting result that negative equity reduces mobility arises because they systematically drop some negative-equity homeowners' moves from the data.
Keywords: Negative Equity; Homeowners Mobility; Labor Markets
JEL Codes: R21; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negative equity (G32) | homeowners' mobility (R21) |
| negative equity (G32) | probability of moving (C69) |
| negative equity (under FGT coding) (D50) | homeowners' mobility (R21) |
| recoding data (Y10) | negative equity homeowners' mobility (R21) |