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Housing tenure, mobility and labour market behaviour

15 May 2017
Description

Research Summary

This study investigated the relationships between housing, housing markets and the labour market. It considered factors such as geographic mobility, reservation wages (i.e. the minimum wage that an unemployed individual can accept) and job search behaviours across a range of housing tenures.

Key findings

  • individuals in private rental accommodation are approximately 15 per cent more likely than outright owners to report moving in any given year
  • owner-occupier mortgagors with low loan-to-value ratios (LVRs) exhibit the lowest rates of geographic mobility
  • there is some evidence that risk aversion is associated with reduced geographic mobility. Risk-averse individuals in private rental accommodation are approximately 2.5 per cent less likely to report moving relative to non-risk-averse individuals in private rental accommodation
  • unemployed owner-occupier mortgagors with low LVRs report lower rates of job search and higher reservation wages than outright owners. Relative to outright owners, their reservation wages are approximately 6 per cent higher.for the underemployed, geographic mobility does not appear to be associated with greater attachment to the labour market
  • homeowners are most likely to change jobs without moving address, compared with other tenures
  • There is some preliminary evidence that labour transitions from unemployment and underemployment differ by tenure status. The strongest effects relate to transitions from underemployment. Mortgagors with higher LVRs are most likely to transition into adequate employment following a period of underemployment.

Policy Implications

Findings from this research have some important implications for housing-related policy development. From a policy perspective, this study highlights the need to ensure that tax policy is as neutral as possible—that is, that it does not favour one tenure unduly over another. In addition, providing Commonwealth Rent Assistance (CRA) at rates that reflect different local housing market conditions across Australia may help individuals and households move to regions that offer better opportunities for employment and economic advancement but have higher housing costs. Similarly, public housing policy could be revised to ensure that it is delivered in a way that removes potential impediments for individuals to engage in the labour market.

Publication Details
Identifiers: 
DOI
10.18408/ahuri-7307101
ISBN
978-1-925334-38-8
ISSN
1834-7223
Publication Place: 
Melbourne, Australia
Series Title: 
AHURI Final Report
Series Volume/No.: 
280
Language: 
License Type: 
CC BY-NC
Peer Reviewed: 
Yes
Alternative Title: 
AHURI Final Report 280

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