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 for lower-level positions nearby. These effects are stronger for job seekers with recourse mortgages, which we confirm using a spatial regression discontinuity analysis. Our findings suggest that housing market distress distorts labor market outcomes by impeding households’ ability to move.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 623-648 |
| Number of pages | 26 |
| Journal | Journal of Financial Economics |
| Volume | 136 |
| Issue number | 3 |
| DOIs | |
| State | Published - Jun 2020 |
Funding
We are grateful to the marketing and data management teams at the company that provided the application data for this research. Brown gratefully acknowledges the financial support of the Social Sciences and Humanities Research Council of Canada. Shumiao Ouyang, Jiaheng Yu, and Yang Zhang provided excellent research assistance. For helpful comments, we also thank Effi Benmelech, Henrik Cronqvist, Thomas Davidoff, Anthony DeFusco, Brian Melzer, Toni Whited, an anonymous referee, and seminar participants at the Australia National University, Columbia University, Federal Deposit Insurance Corporation, Georgetown University, Georgia Institute of Technology, Georgia State University, George Washington University, McGill University, Princeton University, Purdue University, Stockholm School of Economics, University of Alberta, University of British Columbia, University of Chicago, University of Colorado, University of Houston, University of Notre Dame, University of Miami, University of Pittsburgh, University of Regensburg, University of Southern California, University of Toronto, University of Utah, Washington University in Saint Louis, Bank of Canada Workshop on Data Science for Central Banks, Colloquium on Personnel Economics, LMU Munich Workshop on Natural Experiments and Controlled Field Studies, Norges Bank Workshop on Housing and Household Finance, NYU Conference on Household Finance, SITE-CSEF-EIEF Conference on Finance and Labor, Tel Aviv University Finance Conference, and UNC-Duke Corporate Finance Conference.
Keywords
- Housing market
- Job search
- Labor mobility
- Mortgage debt
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
- Strategy and Management
