Working Paper: NBER ID: w22929
Authors: Jennifer Brown; David A. Matsa
Abstract: This paper examines how housing market distress affects job search. Using data from a leading online job search platform during the Great Recession, we find that job seekers in areas with depressed housing markets apply for fewer jobs that require relocation. With their search constrained geographically, job seekers broaden their search to lower level positions nearby. These effects are stronger for job seekers with recourse mortgages, which we confirm using spatial regression discontinuity analysis. Our findings suggest that housing market distress distorts labor market outcomes by impeding household mobility.
Keywords: housing market distress; job search; Great Recession; labor supply; recourse mortgages
JEL Codes: D14; J64; R21; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| housing market distress (R31) | distortions in labor market outcomes (J79) |
| recourse states (Q34) | more geographically constrained job searches (R23) |
| housing market fluctuations (E32) | distort job search behaviors (J29) |
| 30% decline in home values (R31) | 15% decrease in the fraction of job applications submitted to positions outside the applicants' commuting zones (R23) |
| 30% decline in home values (R31) | 14 percentage point increase in applications to jobs requiring less than a year of experience (J62) |