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Panel analysis finds reduced employment rates alongside higher homeownership in regional districts, indicating that lower residential mobility dampens labor market performance.
Isebaert D., Heylen F. and Smolders C. Houses and/or jobs: ownership and the labour market in Belgian districts, Regional Studies. A. J. Oswald argues that high rates of homeownership may imply inferior labour market outcomes. Using a panel of forty-two Belgian districts since the 1970s and accounting for other key determinants of employment, this paper confirms the Oswald hypothesis. A 1 percentage point rise in the rate of ownership in a district implies a statistically significant fall in the employment rate by about 0.35 percentage points. This negative effect declines in the fraction of the high-skilled in a district. The results underscore the importance of controlling for unobserved district-specific fixed effects and common time effects, and of appropriately dealing with endogeneity.
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Isebaert et al. (2013) studied this question.
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