The role of the housing market in workers′ resilience to job displacement after firm bankruptcy

Abstract

We examine the role of the housing market in workers’ adjustment to job displacement. Dutch administrative monthly data were used and analysed with a quasi-experimental design involving job displacement. The estimates show that displaced workers, relative to comparable non-displaced workers, experience besides substantial losses in employment and wages also large increases in the commuting distance. Remarkably, we find that the displacement effect on the probability of changing home is negative. Thus for displaced workers commuting seems to be a more relevant margin of labour adjustment than changing home. The patterns in displacement effects change over the worker’s post-displacement period..