Homeownership and (un)employment: Search theory and empirical evidence from a system GMM

This paper suggests that the sign of the relation between homeownership and (un)employment changes according to both the type of homeowner and the market considered. In the housing market, employment positively affects homeownership with a mortgage (home search), whereas, in the labour market, outright homeownership negatively affects employment (job search). A panel analysis (on 27 European countries for the period 2014-2023) confirms the theoretical hypotheses. An augmented Generalized Method of Moments (GMM) version, known as “system GMM” is used to tackle endogeneity.