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Paper No' SERCDP0103: | Full paper
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Keywords: Entrepreneurship; homeownership; panel estimation
JEL Classification: L26; D14; G11; R21
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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Abstract:We study the link between homeownership and entrepreneurship by exploiting the longitudinal dimension of the British Household Panel Survey (BHPS) and constructing a detailed monthly-spell dataset that tracks individuals? job history and tenure choice, coupled with other time-varying characteristics. Our fixed-effects estimates show that purchasing a house reduces the likelihood of starting a business by 20-25%. This result is driven by homeowners with mortgages and persists for several years after entering homeownership. The negative link can be rationalized by portfolio considerations: leveraged housing investments crowd out entrepreneurial investments. Alternative explanations based on credit constraints find little support in our data.
This paper has been published as:
'Mortgage Debt and Entrepreneurship', Philippe Bracke, Christian Hilber and Olmo Silva, Journal of Urban Economics, Volume 103, January 2018
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