Monday, February 18, 2008

More on Labor Markets vs. Family Values

Following up my last post that suggested family stability inhibits labor flexibility, I might mention that in our own recent hiring experience at Chico State, an inordinate number of good candidates proved unemployable because of the need to accommodate a spouse.

In a similar vein, Andrew Oswald showed that home ownership is the most reasonable explanation for differences in unemployment rates between countries. His scatter graph has a very impressive fit, presumably because people with homes are less likely to pick up and leave for a new job.

Oswald, Andrew J. 1999. "The Housing Market and Europe's Unemployment: A Non-Technical Paper."

http://www2.warwick.ac.uk/fac/soc/economics/staff/faculty/oswald/homesnt.pdf

2 comments:

  1. Michael Perelman,
    that housing paper is shockingly good. Has somebody critiqued it? The policy implication, of course that we should discourage people from living in houses that they own. (Germany does this, not many people do this, but it would be sensible for siblings to buy houses for each other and pay them notional rent. Then the mortgage and repair costs becomes tax deductable.)

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  2. I took a quick look at the paper. Boy, is it interesting. I have thought of the problem of home ownership in a spread out metro area. You buy a house near your job. You get another job. You keep your house and now have a 50 mile commute with the resultant cost and pollution. More densely built cities and good mass transit could solve this problem, but not the problem of moving to another city or state for work. The Twin Cities do not have the affordable rental housing they need for projected increases in the work force (mostly at the low end). So, how do we fill jobs, if people have nowhere to live? Not everyone is willing to live in a shelter in an unfamiliar city in order to work at an $8 an hour job.

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