Homeownership Linked to Higher Unemployment

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    May 12, 2013 6:08 PM GMT
    Hmmm... if this proves out to be causal, this would also add to the plethora of "unintended consequences" from the multitude of interventions governments have used to encourage home ownership...

    http://blogs.wsj.com/economics/2013/05/07/homeownership-linked-to-higher-unemployment/

    Dartmouth College’s David Blanchflower (best known for being the Bank of England member who first pressed for interest rate cuts after the onset of the financial crisis) and Andrew Oswald of the University of Warwick find that a doubling of the rate of home ownership in any U.S. state is followed in the longer run by more than a doubling of the unemployment rate.

    The authors stress that they are not arguing that the owners themselves are disproportionately unemployed. They suggest that lower levels of labor mobility, greater commuting times and fewer new businesses all combine to hurt the labor market.

    Five of the states with the largest increase in homeownership since 1950 — Alabama, Georgia, Mississippi, South Carolina and West Virginia — saw a rise in the jobless rate of 6.3 percentage points between 1950 and 2010. Those with the lowest increase in homeownership — California, North Dakota, Oregon, Washington and Wisconsin — saw a rise in unemployment of 3.5 percentage points over the same time period.
  • B71115

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    May 12, 2013 8:02 PM GMT
    I've seen many stupid studies. Many. But using 60 years to suggest that home ownership is related to unemployment is one of the stupider ones.
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    May 12, 2013 8:06 PM GMT
    B71115 saidI've seen many stupid studies. Many. But using 60 years to suggest that home ownership is related to unemployment is one of the stupider ones.


    It tends to make for a less mobile workforce. Once tied to a home opportunities in markets more than a couple hours drive cannot pursued.

    Unintended consequences of feel-good government policies. A home is not an investment. You own one because you want one and have the financial means to maintain it.

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    May 12, 2013 8:53 PM GMT
    B71115 saidI've seen many stupid studies. Many. But using 60 years to suggest that home ownership is related to unemployment is one of the stupider ones.


    Any other rationale beyond the obvious cognitive dissonance you don't seem to want to overcome?
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    May 12, 2013 9:10 PM GMT
    desertmuscl said, " A home is not an investment."

    OK. *looks at bank account, grins knowing otherwise*
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    May 12, 2013 9:18 PM GMT
    meninlove said desertmuscl said, " A home is not an investment."

    OK. *looks at bank account, grins knowing otherwise*


    Er... is that supposed to count as logic? The ones who "invested" early in the tulip mania also made a lot of money.

    I tend to think it is an investment because it's a function of localized income over time since people have to rent or buy. So a best metric of "value" is income relative to rent. But there can be bubbles as we know - and Vancouver/BC being one of the obvious ones.

    Where this study is interesting is at the margins of people who should have never owned who are now significantly underwater or can't afford their mortgages because of government subsidies (mortgage interest deduction, fed rate, fannie mae/freddie mac, etc). These are likely the people who would benefit most from mobility and travelling to where the jobs are.
  • Posted by a hidden member.
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    May 12, 2013 9:45 PM GMT
    Meh, who needs a home anyway? Just leave it to market forces.

    dust-bowl-nipomo-lange-thumb-600x477-170
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    May 12, 2013 11:32 PM GMT
    Ex_Mil8 saidMeh, who needs a home anyway? Just leave it to market forces.

    dust-bowl-nipomo-lange-thumb-600x477-170


    More people have homes and better homes because of market forces. Is your memory of history that short?
    http://en.wikipedia.org/wiki/Council_house

    And let's look at housing that is still owned and operated by governments - how generally well maintained are they?
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    May 12, 2013 11:35 PM GMT
    In unrelated news, mobile home ownership linked to meth addiction...icon_eek.gif
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    May 13, 2013 12:39 AM GMT
    Depends on what your career is. If you are in a specialty and there are only one or two tech employers in the area, owning is more of a risk.

    If you're in finance, like my sister, the only thing she has to worry about is state licensing. CPA requirements vary by state. Similar situation with teaching public schools.

    I'm done with owning for a while. I prefer to rent as those managers have the balls to encourage civility amongst residents. Property managers for condo/CID situations tend to be lazy, ineffective, political nightmare PTA members. California's Davis-Sterling laws just didn't help.

    There is something to be said for mobility.

  • HottJoe

    Posts: 21366

    May 13, 2013 12:47 AM GMT
    riddler78 said
    meninlove said desertmuscl said, " A home is not an investment."

    OK. *looks at bank account, grins knowing otherwise*


    Er... is that supposed to count as logic? The ones who "invested" early in the tulip mania also made a lot of money.

    I tend to think it is an investment because it's a function of localized income over time since people have to rent or buy. So a best metric of "value" is income relative to rent. But there can be bubbles as we know - and Vancouver/BC being one of the obvious ones.

    Where this study is interesting is at the margins of people who should have never owned who are now significantly underwater or can't afford their mortgages because of government subsidies (mortgage interest deduction, fed rate, fannie mae/freddie mac, etc). These are likely the people who would benefit most from mobility and travelling to where the jobs are.


    The problem with tulips is that they don't keep the rain out.icon_sad.gif
  • HottJoe

    Posts: 21366

    May 13, 2013 12:48 AM GMT
    turbobilly saidIn unrelated news, mobile home ownership linked to meth addiction...icon_eek.gif


    That's just a coincidence.icon_mad.gif
  • Posted by a hidden member.
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    May 13, 2013 12:51 AM GMT
    Maybe this "low labor mobility" is due to the all-American car-centric city planning.
  • O5vx

    Posts: 3154

    May 13, 2013 1:12 AM GMT
    That's rubbish. There is no causation link between the two at all. There could be other factors that affects the unemployment other than the ownership of housing.
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    May 13, 2013 2:25 AM GMT
    It's interesting, but I'm a little skeptical. For instance the article summary writes that
    Posted article said
    Five of the states with the largest increase in homeownership since 1950 — Alabama, Georgia, Mississippi, South Carolina and West Virginia — saw a rise in the jobless rate of 6.3 percentage points between 1950 and 2010. Those with the lowest increase in homeownership — California, North Dakota, Oregon, Washington and Wisconsin — saw a rise in unemployment of 3.5 percentage points over the same time period.


    So I looked up a couple of these. The home ownership rate in Oregon was 65 percent in 1950, and the home ownership rate was 38 percent in Mississippi. It seems to me that the more significant difference between the two isn't their INCREASE in home ownership rate, but rather the levels of home ownership in the first place. Oregon's economy in 1950 may well have been conducive to a stronger overall economy. I posit for instance lower wealth inequality in Oregon than in Mississippi, which was still coming out of decades of sharecropping and other forms of extreme inequality.

    This pattern holds. Wisconsin 63.5%, Washington 65%, South Carolina 45%, Georgia 46.5%, etc.

    It seems reasonable to argue that the more dispersed wealth in Oregon was more conducive to long term growth.
  • HndsmKansan

    Posts: 16311

    May 13, 2013 2:31 AM GMT
    Sounds ridiculous to me.

    icon_mad.gif
  • Posted by a hidden member.
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    May 13, 2013 2:33 AM GMT
    Well, you look ridiculous to me.icon_mad.gif
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    May 13, 2013 7:25 AM GMT
    riddler78 said
    Ex_Mil8 saidMeh, who needs a home anyway? Just leave it to market forces.

    dust-bowl-nipomo-lange-thumb-600x477-170


    More people have homes and better homes because of market forces. Is your memory of history that short?
    http://en.wikipedia.org/wiki/Council_house

    And let's look at housing that is still owned and operated by governments - how generally well maintained are they?


    You mentioned government intervention in home ownership and nothing about publicly owned housing, so please try to stick to your own subject.
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    May 13, 2013 11:18 AM GMT
    Ex_Mil8 said
    riddler78 said
    Ex_Mil8 saidMeh, who needs a home anyway? Just leave it to market forces.

    dust-bowl-nipomo-lange-thumb-600x477-170


    More people have homes and better homes because of market forces. Is your memory of history that short?
    http://en.wikipedia.org/wiki/Council_house

    And let's look at housing that is still owned and operated by governments - how generally well maintained are they?


    You mentioned government intervention in home ownership and nothing about publicly owned housing, so please try to stick to your own subject.


    Ahem, you're the one who brought up the claim that market forces were the issue. Your laughable driveby sarcasm barely even had a point (with a picture that certainly didn't show it). The opposite is government control, ownership and intervention. So it's still on topic even if you'd prefer it weren't.
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    May 13, 2013 11:21 AM GMT
    O5vx saidThat's rubbish. There is no causation link between the two at all. There could be other factors that affects the unemployment other than the ownership of housing.


    Rubbish? They haven't shown causation but they do suggest reasons this could be causal:

    ie "The authors stress that they are not arguing that the owners themselves are disproportionately unemployed. They suggest that lower levels of labor mobility, greater commuting times and fewer new businesses all combine to hurt the labor market."

    Further, this also goes to support other research that suggests home ownership reduces entrepreneurship:

    http://www.huffingtonpost.com/2012/05/31/homeownership-buying-house-entrepreneur_n_1560180.html

    Decades of promoting homeownership may have stifled the U.S. economy.

    That's the implication of a new study, which found that owning a home makes people less likely to become entrepreneurs.

    The study, by Philippe Bracke, Christian Hilber, and Olmo Silva, economists at the Spatial Economics Research Centre in London, found that homeowners in the U.K. are less likely to become entrepreneurs because their mortgage is so risky that they are unwilling to take on more risk by starting a new business.

    The U.S. government has been promoting homeownership for decades, and it's worked. More than 65 percent of all Americans are homeowners, according to the Census.
  • FitGwynedd

    Posts: 1468

    May 13, 2013 11:28 AM GMT
    riddler78 said
    Ex_Mil8 said
    riddler78 said
    Ex_Mil8 saidMeh, who needs a home anyway? Just leave it to market forces.

    dust-bowl-nipomo-lange-thumb-600x477-170


    More people have homes and better homes because of market forces. Is your memory of history that short?
    http://en.wikipedia.org/wiki/Council_house

    And let's look at housing that is still owned and operated by governments - how generally well maintained are they?


    You mentioned government intervention in home ownership and nothing about publicly owned housing, so please try to stick to your own subject.


    Ahem, you're the one who brought up the claim that market forces were the issue. Your laughable driveby sarcasm barely even had a point (with a picture that certainly didn't show it). The opposite is government control, ownership and intervention. So it's still on topic even if you'd prefer it weren't.


    No, your just dodging the question. Like you always do, you compress the least amount of intellect into the greatest amount of words.
  • FitGwynedd

    Posts: 1468

    May 13, 2013 11:36 AM GMT
    bachian saidMaybe this "low labor mobility" is due to the all-American car-centric city planning.


    U.S. cities have moved away from car-centric planning over the past 30 years. And high car ownership also goes with high public transport usage, such as in Germany, France and Scandanavia. Therefore I don't see how your point has any merit.
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    May 13, 2013 11:43 AM GMT
    FitGwynedd said
    riddler78 said
    Ex_Mil8 said
    riddler78 said
    Ex_Mil8 saidMeh, who needs a home anyway? Just leave it to market forces.

    dust-bowl-nipomo-lange-thumb-600x477-170


    More people have homes and better homes because of market forces. Is your memory of history that short?
    http://en.wikipedia.org/wiki/Council_house

    And let's look at housing that is still owned and operated by governments - how generally well maintained are they?


    You mentioned government intervention in home ownership and nothing about publicly owned housing, so please try to stick to your own subject.


    Ahem, you're the one who brought up the claim that market forces were the issue. Your laughable driveby sarcasm barely even had a point (with a picture that certainly didn't show it). The opposite is government control, ownership and intervention. So it's still on topic even if you'd prefer it weren't.


    No, your just dodging the question. Like you always do, you compress the least amount of intellect into the greatest amount of words.


    Dodging the question? What question was asked?
  • Posted by a hidden member.
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    May 13, 2013 11:44 AM GMT
    FitGwynedd said
    bachian saidMaybe this "low labor mobility" is due to the all-American car-centric city planning.


    U.S. cities have moved away from car-centric planning over the past 30 years. And high car ownership also goes with high public transport usage, such as in Germany, France and Scandanavia. Therefore I don't see how your point has any merit.


    The US has had lower unemployment than the countries you've cited historically so again you show you have little understanding of the issue altogether.
  • FitGwynedd

    Posts: 1468

    May 13, 2013 11:51 AM GMT
    riddler78 said
    FitGwynedd said
    bachian saidMaybe this "low labor mobility" is due to the all-American car-centric city planning.


    U.S. cities have moved away from car-centric planning over the past 30 years. And high car ownership also goes with high public transport usage, such as in Germany, France and Scandanavia. Therefore I don't see how your point has any merit.


    The US has had lower unemployment than the countries you've cited historically so again you show you have little understanding of the issue altogether.


    You have little understanding of anything. You live in a world of right-wing Thatcherite bullshit articles citing a discredited Chicago school of economics while you rattle the bones of the ghost of Milton Friedman. You post stupid articles and waste everyone's time on RJ. Time and time again history has proven whatever you are trying to argue as wrong, and you see something on foxnews and orgasm and have to subject everyone on here to your views. I don't like you, your face, or what you have to say, and I have a much greater understanding of how the world works than you can even begin to comprehend. In fact there is not even any point in acknowledging you as worthy of a response, because your not. So I would like to quote a great American, Barney Frank.

    'It is a testament to free-speech that your vile misinformation can be so freely propagated. Talking to you is like arguing with a dining room table, I have no interest in doing it.'