American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Moving to a Job: The Role of Home Equity, Debt, and Access to Credit
American Economic Journal: Macroeconomics
vol. 9,
no. 2, April 2017
(pp. 149–81)
Abstract
We use individual-level credit reports merged with loan-level mortgage data to estimate how home equity interacted with mobility in relatively weak and strong labor markets in the United States during the Great Recession. We construct a dynamic model of housing, consumption, employment, and relocation, which provides a structural interpretation of our empirical results and allows us to explore the role that foreclosure played in labor mobility. We find that negative home equity is not a significant barrier to job-related mobility because the benefits of accepting an out-of-area job outweigh the costs of moving. This pattern holds even if homeowners are not able to default on their mortgages.Citation
Demyanyk, Yuliya, Dmytro Hryshko, María Jose Luengo-Prado, and Bent E. Sørensen. 2017. "Moving to a Job: The Role of Home Equity, Debt, and Access to Credit." American Economic Journal: Macroeconomics 9 (2): 149–81. DOI: 10.1257/mac.20130326Additional Materials
JEL Classification
- D14 Household Saving; Personal Finance
- G01 Financial Crises
- J61 Geographic Labor Mobility; Immigrant Workers
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R31 Housing Supply and Markets