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Effect of housing situation on labour supply


Publication number: 2012-25
Authors: A. Heyma, J. Prins
Commissioned by: Ministerie van Binnenlandse Zaken en Koninkrijksrelaties
Publisher: SEO Economic Research
ISBN: 978-90-6733-658-1

Home owners work more hours per week, remain longer in the same job en have lower chances of unemployment than comparable workers who rent. Home ownership is thus correlated with a higher level of labour supply. A larger (financial) value of the home seems to be an important reason for workers to invest in their (existing) labour position. A dynamic housing market makes it easier for workers to find an appropriate home without the need to change jobs, and workers who desire or need to change jobs find an appropriate job easier without the need to move. As a result, more dynamics in the housing market also lead to a higher level of labour supply.

The conclusions above follow from an analysis of job durations, job mobility and number of working hours of all Dutch employees with a job anywhere between 2006 and 2008. Using administrative data from Statistics Netherlands, the housing and working situations of all these workers have been identified since 1995. Exploring the order in which job mobility and housing mobility have taken place and taking account of the correlation between both individual decision processes using state-of-the-art econometric techniques, an attempt is made to identify the causal relationship between the housing situation and the level of individual labour supply.


Category: 2012, Arjan Heyma, Labour & Education