Moving to a Job: The Role of Home Equity, Debt, and Access to Credit
||Original Paper: WP 13-05|
Using individual-level credit reports merged with loan-level data on mortgages, we estimate how mobility relates to home equity and labor market conditions. We control for constant individual-specifi c traits with fi xed effects and fi nd that homeowners with negative home equity move to other metropolitan areas more than other homeowners. We use a dynamic quantitative model of consumption, housing, employment, and mobility to interpret our fi ndings. The utility gain from accepting a higher-paid job in another area is negatively correlated with home equity. The relationship between home equity and mobility in the data is well replicated by the model.
Key words: unemployment, mobility, mortgages, negative equity.
JEL codes: J61, G21, G01, D11, D12.