Local Agglomeration and Household Mortgage Debt

• 成果类型: Article
• 署名作者: Chen, Fengqin Freya; Saffar, Walid; Shang, Longfei
• 署名单位: Shanghai University of Finance & Economics; Hong Kong Polytechnic University; Southwestern University of Finance & Economics - China; Southwestern University of Finance & Economics - China
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.03486
• 发表日期: 2025
• 关键词: local agglomeration; Mortgage debt; labor market composition

摘要

Using detailed household data, we find that households working in locally agglomerated economies have high mortgage loans and are more likely to have mortgage loans. Channel testing shows that local agglomeration increases housing and mortgage demand as well as mortgage supply. The increase in mortgage loans is driven by purchases of larger houses and smaller down payments. Mechanism analyses document that local agglomeration affects mortgage loans by increasing career upward potential and providing downside protection. Specifically, we find that the impact of local agglomeration is stronger for skilled employees with enhanced prospects. In addition, local agglomeration weakens the negative relation between unemployment and mortgage loans, which supports the downside-protection role of local agglomeration. These results hold under instrumental variables analysis, difference-in-difference analysis, and a set of robustness checks. Overall, our findings highlight the importance of local labor market composition in household mortgage debt.