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More Home Owners = More Unemployment

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Unemployment is a major source of unhappiness and mental ill-health.

Yet after a century of economic research, the determinants ofunemployment are still imperfectly understood, and unemployment levels in the industrialised nations are around 10 per cent, with some over 20 per cent.

The historical focus of the literature has been on which labour market characteristics – trade unionism, unemployment benefits, job protection, etc – are particularly influential. Contrary to what many on the right have claimed, they aren't.

In a new paper Professor Andrew Oswald from the University of Warwick and I propose a different approach to the problem by exploring the hypothesis that high home ownership damages the labour market. Our study provides evidence consistent with the view that the housing market plays a fundamental role as a determinant of the rate of unemployment.

We find that rises in the home ownership rate in a US state are a precursor to eventual sharp rises in unemployment in that state. A doubling of the rate of home ownership in a US state is followed in the long run by more than a doubling of the later unemployment rate. We also find that high home ownership lowers employment rates. These effects do take some time to develop – roughly of the order of five years.

More at link

Edited by Secure Tenant

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Tosser has no understanding of the stats, the drivers to employment - or should I say the drivers out of employment that misallocation of capital, propeorty bubbles and his own central bank policies create.

Should just shut up and piss off back to college, good riddance to the FED stooge.

Edited by OnlyMe

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This is the trouble with them. They cant accept its just innovation and new technologies that spur demand and investment, because its something, as intellectuals, who spend their entire live procrastinating, creating nothing, they have no control over. They have to reduce it to monetary policy so as to justify their own existence.

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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