NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Locked in by Leverage: Job Search during the Housing Crisis

Jennifer Brown, David A. Matsa

NBER Working Paper No. 22929
Issued in December 2016
NBER Program(s):Corporate Finance, Labor Studies

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.

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Document Object Identifier (DOI): 10.3386/w22929

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