High Home Ownership Is Strongly Linked To High Unemployment [STUDY]

[xchrom]

http://www.businessinsider.com/high-home-ownership-is-strongly-linked-to-high-unemployment-2013-11



LONDON (Reuters) - High levels of home ownership are strongly linked to subsequent rises in unemployment because labor mobility becomes reduced, according to new research.

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.

But he said the linkage, established using data on millions of randomly sampled Americans, was extraordinarily robust.

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



Read more: http://www.businessinsider.com/high-home-ownership-is-strongly-linked-to-high-unemployment-2013-11#ixzz2jOT7w1JZ


***color me skeptical.

[Skidmore]

1. I share your skepticism on this one.

I would think that rises in unemployment could be better linked to changes in the business community. Home owners are workers and workers live where the jobs are. When jobs dired up in our area, houses sat empty because no one could buy or maintain them without income. Yes, people become attached to communities after purchasing homes but owning a home but the link to employment is only a consequence of businesses moving in and out.

[xchrom]

2. indeed.

having lived in peoria a good deal of my life -- when caterpillar would go on one it's wars on the union and lock workers out for extended periods -- people would just leave if they couldn't make ends meet.

[Yo_Mama]

3. I think couples working is a more significant contributor to unemployment

This rather simplistic analysis ignores the fact that two-person career families have very low labor mobility also - when one person loses a job, the other job becomes more, not less, important, and the job search is confined to the local area whether the unemployed person lives in a rental home, a rental apartment, or their own home.

Another factor that contributes largely to lower labor mobility is the combination of lower wages and working custodial parents, for whom child care arrangements are essential. This has been studied and confirmed. If you are in an area in which you have reliable affordable child care with sick day backup, most parents will not be able to move to a new location without those arrangements, unless they are slated to make a lot of money and can afford to hire someone to stay at the home with the child/children.

No one talks much about the position of the working mother or family with two kids who get sick with the flu or a cold or a stomach bug. The child care places won't take them, so you need someone to sit with them at home. When you start a new job, they are going to get very angry if you don't show up. Many such parents stay close to family for this reason alone - they have help when they need it most, and it is essential for them to have that help in order to keep working.

[fasttense]

4. I think the one does NOT cause the other

Though they may occur together, it does not mean one causes the other. There is more going on than the study captures.

Most people Don't buy a house if they Don't have a job. So, the people who bought the houses had jobs.

So what happened to the jobs? That is the real question.

[magical thyme]

5. ah, the crux of the problem....

"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."

How dare we laborers want to put down roots and built strong communities instead of all living like vagabonds, traveling to wherever our "business leaders" and "the market" demand we go.

I blame the media. For decades they've been teaching us we're "consumers." They should have been teaching us we're "homeless, migrant workers."


for the seriously impaired....

[FarCenter]

6. The prosperity of the 50s/60s was preceded by a period of high mobility

Lots of people moved during the Depression in search of work. Lots more moved after WW II since they had been shifted around the country while in uniform and decided that other parts of the country held more opportunity. There was also substantial movement to areas doing war production.

Companies come and go. Technological change, exhaustion of resources, and competition from other states and nations causes the life of a company or subsidiary to be relatively short. Anyone hiring into a mature industry out of college should not expect to finish their career with that company.