June 20, 2007

The impact of housing market institutions on labour mobility; a European cross-country comparison

Overdrachtsbelasting beperkt de arbeidsmobiliteit

Press release
De transactiekosten bij aankoop van een woning beperken de arbeidsmarktmobiliteit van eigenwoningbezitters. Een afname van de overdrachtsbelasting met 1%-punt leidt tot een verhoging van het aantal baanwisselingen met circa 1,5 procent.

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Michiel van Leuvensteijn
Dick Morks

In this paper, we study the effects of housing market institutions on labour mobility. We construct durations for individuals leaving their current job for a different job, becoming unemployed or leaving the labour market, from a sample of households from 14 European countries in 1994–2001.

We merge this data with country specific housing market institutions, such as transaction taxes, and language and religion diversity. Similar to previous studies, estimated hazards indicate that home-ownership reduces job-to-job mobility as well as the probability to become unemployed or economically inactive on a individual level. However, a comparison between countries reveals that countries with high levels of homeownership rates also have high levels of unemployment. Therefore, this paper is able to reconcile the seemingly contrasting empirical results from both the macroeconomic and the microeconomic level.


Michiel van Leuvensteijn
Thomas de Graaff