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

The severe decline in house prices during and after the Great Recession may have hampered adjustment in U.S. labor markets by limiting mobility of unemployed workers. Mobility will suffer if unemployed workers are reluctant to leave homes that, with debt exceeding value, cannot be disposed of without injecting cash or defaulting-a pattern referred to as "housing lock-in." If such reluctance keeps workers from moving from depressed areas to areas with available jobs, the Beveridge curve, which depicts the relationship between vacancies and joblessness, may shift outward. To examine whether......(read more)

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