The effect of Housing Status on Labor Market Outcomes

Abstract

In the past, urban planning has often favored strict zoning, segregating residential areas from commercial-industrial areas. One unanticipated negative consequence of this strategy is a possible link between unemployment and housing status, suggested by Oswald in an important and controversial 1997 paper. He believes that home ownership reduces labor mobility, thereby creating disequilibrium and unemployment in regional labor markets. Compared with European countries and the United States-- the focuses of most empirical studies on the topic-- Hong Kong is decidedly more compact. Much of the city is covered by a rather efficient transportation system, making it unlikely as a choice for testing the Oswald hypothesis. However, over the years, a combination of factors, including escalating property …