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Working Paper

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

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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-specific traits with fixed effects and find 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 findings. 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.
Topics
Lending and access to credit
01.01.2014ISSN 2573-7953 WP 13-05ROriginal Paper WP 13-05DOI 10.26509/frbc-wp-201305r
Keywords unemployment, mobility, mortgages, negative equity
JEL Classification Codes J61, G21, G01, D11, D12

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

Suggested Citation

Demyanyk, Yuliya, Dmytro Hryshko, María José Luengo-Prado, and Bent E. Sørensen. 2014. “Moving to a Job: The Role of Home Equity, Debt, and Access to Credit .” Federal Reserve Bank of Cleveland, Working Paper No. 13-05R. https://doi.org/10.26509/frbc-wp-201305r