Homeownership is believed to cause higher unemployment. This is because homeowners face higher mobility costs that limit their
job search to local labour markets. Empirical tests of this prediction have yielded mixed results so far, possibly due to
the endogeneity of homeownership. This paper documents that the privatisation of public housing in Central and Eastern Europe
after the fall of the Iron Curtain resulted in a quasi-experimental assignment of homeownership to individual households.
This facilitates a new test of the effects of homeownership on mobility and unemployment. We find only weak evidence that
homeowners are less willing to move and no evidence of higher unemployment risks relative to renters.
Forschungsbereich:Strukturwandel und Regionalentwicklung