DP9474 Moving to a Job: The Role of Home Equity, Debt, and Access to Credit

Author(s): Yuliya Demyanyk, Dmytro Hryshko, Maria Jose Luengo-Prado, Bent E Sørensen
Publication Date: May 2013
Keyword(s): credit contraint, credit reports, mobility, unemployment
JEL(s): D1, E2
Programme Areas: International Macroeconomics, Labour Economics, Financial Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=9474

Using credit report data from two of the three major credit bureaus in the United States, we infer with high certainty whether households move to other labor markets defined by metropolitan areas. We estimate how moving patterns relate to labor market conditions, personal credit, and homeownership using panel regressions with fixed effects which control for all constant individual-specific traits. We interpret the patterns through simulations of a dynamic model of consumption, housing, and location choice. We find that homeowners with negative home equity move more than other homeowners, in particular when local unemployment growth is high---overall, negative home equity is not an important barrier to labor mobility.