Unemployment Insurance as a Housing Market Stabilizer

• 成果类型: Article
• 署名作者: Hsu, Joanne W.; Matsa, David A.; Melzer, Brian T.
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; Northwestern University; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20140989
• 发表日期: 2018
• 页码: 49-81
• 关键词: MORTGAGE DEFAULT; automatic stabilizers; social insurance; benefits; spells; Foreclosures; EMPLOYMENT; RISK

摘要

This paper studies the impact of unemployment insurance (UI) on the housing market. Exploiting heterogeneity in UI generosity across US states and over time, we find that UI helps the unemployed avoid mortgage default. We estimate that UI expansions during the Great Recession prevented more than 1.3 million foreclosures and insulated home values from labor market shocks. The results suggest that policies that make mortgages more affordable can reduce foreclosures even when borrowers are severely underwater. An optimal UI policy during housing downturns would weigh, among other benefits and costs, the deadweight losses avoided from preventing mortgage defaults.