Institutional Affiliation: Murdoch University
NBER Working Papers and Publications
|October 2003||Homeownership and Unemployment: The Roles of Leverage and Public Housing|
with Matt Forbes, Patric H. Hendershott: w10021
Oswald hypothesizes that regions and countries with high homeownership rates will experience higher natural rates of unemployment and that rising homeownership in OECD countries since the 1960s provides a key explanation for the rise in the natural rate of unemployment over the same time period. Recent tests of the Oswald thesis have found the opposite. This study differs from earlier ones both by considering different states of ownership (degrees of leverage) and types of tenancy (private, public, and rent-free) and by examining data from Australia, rather than the U.S. We demonstrate that the recent anti-Oswald results are the result of (1) highly leveraged owners having a greater incentive to remain employed and to become reemployed more rapidly that outright owners and (2) those paying...