The role of the housing market in workers′ resilience to job displacement after firm bankruptcy
AuthorMeekes, J; Hassink, WHJ
Source TitleJournal of Urban Economics
University of Melbourne Author/sMeekes, Jordy
AffiliationMelbourne Institute of Applied Economic and Social Research
Document TypeJournal Article
CitationsMeekes, J; Hassink, WHJ, The role of the housing market in workers′ resilience to job displacement after firm bankruptcy, Journal of Urban Economics, 2019, 109 pp. 41 - 65
Access StatusThis item is embargoed and will be available on 2021-01-01
We examine the role of the housing market in workers’ adjustment to job displacement. Dutch administrative monthly data were used and analysed with a quasi-experimental design involving job displacement. The estimates show that displaced workers, relative to comparable non-displaced workers, experience besides substantial losses in employment and wages also large increases in the commuting distance. Remarkably, we find that the displacement effect on the probability of changing home is negative. Thus for displaced workers commuting seems to be a more relevant margin of labour adjustment than changing home. The patterns in displacement effects change over the worker’s post-displacement period – the negative effect on wages becomes more pronounced, whereas the increase in the commuting distance diminishes. The results suggest that displaced workers who are longer unemployed prefer working closer to home over higher wages. Also, we examine the role of workers’ housing state in the displacement effects. We find that leveraged displaced owners, compared with displaced tenants and outright owners, are more rapidly re-employed and experience a smaller increase in the commuting distance but also a higher loss in wage.
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