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Title: Homeownership, Housing Capital Gains and Self-Employment

Citation Type: Journal Article

Publication Year: 2017

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Abstract: This paper measures the impact of individual-level housing capital gains on transitions into and out of self-employment. Drawing on special features of the 1985-2013 American Housing Survey (AHS) panel, our most robust models control for recent expenditures on home maintenance, MSA-by-year fixed effects, lagged proxies for wealth and other household attributes. Net of home maintenance, a 20 percent real increase in home value over a two-year period raises the likelihood of entry into self-employment by roughly 1.5 percentage points; housing capital losses have little effect on exits. Controlling for house fixed effects, self-employed homeowners are also more likely to hold a HELOC, facilitating easy, lowcost access to home equity that could be used to cover business expenses. These and other estimates suggest that links between homeownership and self-employment are strong enough to be important when home prices are rising rapidly, but modest when housing capital gains are limited or negative.

Url: https://www.sciencedirect.com/science/article/pii/S0094119016300845

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Authors: Harding, John P; Rosenthal, Stuart S

Periodical (Full): Journal of Urban Economics

Issue: 1

Volume: 99

Pages: 120-135

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

Countries: United States