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...
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.