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High Home Ownership is Strongly Linked to High Unemployment?
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Games Meister
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Nov 4, 2013, 03:50 PM
 
I didn't see that coming...
High Home Ownership Is Strongly Linked To High Unemployment [STUDY] - Business Insider
Using data going back to 1950 across all U.S. states except Alaska and Hawaii, Warwick University economics professor Andrew Oswald finds that the lag from ownership levels to unemployment rates can take up to five years to show up.

Doubling home ownership in a state can lead to more than a doubling of the jobless rate.

"I have become convinced that by boosting home ownership we have ruined our labor market," Oswald said.

He conducted his research with David Blanchflower, a professor of economics at Dartmouth College, New Hampshire, who used to be a member of the Bank of England's Monetary Policy Committee.

Oswald said the research may go some way to explaining why Spain, with a home ownership rate of 80 percent, has unemployment above 25 percent, whereas Switzerland, with a 30 percent ownership rate, has a jobless rate of just 3 percent.

Germany, another nation of renters rather than home owners, also has relatively low unemployment.
Home ownership unwittingly impairs the labor market by deterring people from moving in search of work, a process that is time-consuming and expensive; long commuting times might also discourage a householder from taking a particular job, his research suggests.
I certainly couldn't fathom the connection until the article spelled it out for me. I could see people being reluctant to move from somewhere they planned their life around and invested time into, though I'm curious what that says about a renters lifestyle (i.e., overall happiness). I've always considered people reluctant to move, usually in relation to the "go to the state that most suits you argument", but this adds a new twist.

I'll be curious to see if other studies back him up.
     
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Nov 4, 2013, 04:15 PM
 
I saw something like this a while ago, unfortunately (no digs allowed Dakar) France's situation doesn't back this up : it has one of the lowest percentages of home ownership in Europe, yet high unemployment.

Too many other variables IMHO to have a direct correlation.
     
Clinically Insane
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Nov 4, 2013, 08:05 PM
 
No digs, huh?
     
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Nov 5, 2013, 01:05 PM
 
Originally Posted by subego View Post
No digs, huh?
Me? I'll be paying for my house for the next 23 years.
     
Clinically Insane
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Nov 5, 2013, 11:35 PM
 
Originally Posted by mattyb View Post
I saw something like this a while ago, unfortunately (no digs allowed Dakar) France's situation doesn't back this up : it has one of the lowest percentages of home ownership in Europe, yet high unemployment.

Too many other variables IMHO to have a direct correlation.
Well, yeah, in France's case, idiots at the helm of the country, for one.

But fear not, the US is copying that "success story" as we speak.

-t
     
   
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