Did The Economic Crisis Have The Same Effect On Home-Owners And Renters In Terms Of Employment?

This paper investigates the effects of housing tenure choice (home-owning/renting) on individuals' employment status (employed/unemployed) through the empirical estimation of different dynamic panel data models with Spanish data covering the period 2004-2012 sourced from the EU Statistics on Income and Living Conditions. Taking into account the effect of unobserved heterogeneity, the endogeneity of housing tenure choice, and distinguishing between spurious state dependence and true state dependence, we find that there is no evidence of any significant spillover effect of the aggregate regional home-ownership rate on individuals' probability of employment. However, the average effect of housing tenure choice on this probability is robust and significantly positive, ranging from 3.8 percentage points for the home-owners group as a whole, and 4.3 percentage points for those home-owners with a mortgage left to pay off.