Increased home ownership could be detrimental to the labour market

The prospects of Warwick students owning a home in later life may have an impact on the health of the labour market.

This is according to statistical evidence gathered by Warwick University Economics professor Andrew Oswald. The data has been collected from mainland United States reaching as far back as the 1950s.

The unemployment rate was discovered to have more than doubled if the number of people owning a house in a US state also doubled.

Home owners’ lack of mobility can explain this pattern, suggests Oswald. There is little incentive for a home owner to relocate in order to find work due to the possible number of costs.

Other potential economic side-effects have been outlined such as the largely negative attitude of home owners towards incoming local business. Lengthy daily commuting may also deter people from taking significant employment opportunities.

The statistical correlation is present on a global scale. Spain continues to have a large population of homeowners at around 80 percent though unemployment remains at 27 percent.

Switzerland’s much lower levels of unemployment at three percent sit alongside a comparatively low ownership rate of 30 percent.

These studies also revealed the trend has become more prevalent since the 1980s.

Many Warwick students will consider how long they may have to wait before owning a house is a viable option. The research suggests that continuing to rent may perhaps be more practical, even in the long term.

Students’ opinions on these issues are varied. Benjamin David, a mature first-year Philosophy student, told the Boar: “Most peoples’ aims of owning a home outright prior to retirement is so that we can retire.”

“That is a good thing if we can achieve it, because we will be less of a burden on the state.” he added.

Owain Ritchie, a first-year Psychology student, remarked: “I think people should wait until they have some sort of stable income lined up and perhaps longer if it looks like moving for employment is likely.”

This new research may have an impact on government schemes which will aim to encourage people to buy their own property.