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The short-term relationship between unemployment and home ownership

Abstract: This work focuses on the Oswald hypothesis and answers the question about what the relationship is between changes in home ownership and unemployment on an individual level in the Czech Republic. The first and main hypothesis is that a transition to home ownership reduces the probability of unemployment in the following year. Data from EU-SILC proves that this hypothesis holds true, but only for men and not for women. With this in mind, we present a second hypothesis that argues that the relationship between homeownership and unemployment on an individual level varies over time in relation to the lower and higher probability of unemployment. The primary reason for this is the “mortgage effect”, which is later outweighed by the migration effect. The research shows that the transition to unemployment does not affect the possibility of a transition to home ownership in the following year, neither for men nor women. For the third hypothesis, the expectation was that there would be a significant difference between men and women. This was confirmed because the first hypothesis holds true only for men and not for women.

Authors: Dominik Stroukal
Keywords: Home ownership, unemployment, Oswald
Volume: 9
Issue: 1
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