Tied Down Or Room To Move? Investigating The Relationships Between Housing Tenure, Employment Status And Residential Mobility In Britain

Published date01 September 2002
AuthorRené Böheim,Mark P. Taylor
Date01 September 2002
¨heim*and Mark P. Taylor **
Using data from the British Household Panel Survey, we investigate the
relationships between labour market dynamics, housing tenure and residential
mobility. Panel data allow the study of the sequence of household moves and
individual labour market status changes, enabling unique analysis of the
relationship between job and residential mobility. Our findings suggest that the
unemployed are more likely to move than employees. A desire to move motivated
by employment reasons has the single largest positive impact on the probability of
moving between regions.
Frequently investment goes where there are skilled people wanting work. But
there must be some mobility of labour. If people are not willing to move as
their fathers did the economy cannot thrive (Margaret Thatcher, 1980).
We cannot ignore the price that unemployment today is exacting. I know
these problems. I grew up in the thirties with an unemployed father. He didn’t
riot. He got on his bike and looked for work and he kept looking until he
found it (Norman Tebbit, 1981).
Housing and labour markets are closely linked as individuals need to live within
reach of their work place. For those in employment the choice of residence
is restricted by commuting costs and time. Furthermore, job and employer
changes often require house moves, and housing demand will reflect patterns in
employment turnover and labour market trends. Using data from the British
Household Panel Survey, we examine the relationships between labour market
dynamics and residential mobility. Panel data allow the study of the sequence
of household moves and individual labour market status changes and provide
Scottish Journal of Political Economy,Vol.49,No.4,September2002
#Scottish Economic Society 2002,Publ ishedby Blackwell Publishers Ltd, 108 Cowley Road, Oxford OX4 1JF, UK and
350 Main Street, Malden, MA 02148, USA
*University of Munich
**University of Essex
important information on the events associated with each. Previous studies have
almost exclusively used Census or cross-sectional data to study residential
mobility, and ‘the general lack of longitudinal data is a major vacuum in
understanding British migration ... ’ (Coleman and Salt, 1992, p. 400). We
contribute uniquely to the literature by using panel data to examine the links
between housing tenure and residential and job mobility in Britain.
In comparison with the United States, the degree of residential mobility in
Britain is low (Greenword, 1997). However, levels of regional migration are similar
to those in other Northern European countries (Hughes and McCormick, 1987).
Previous British studies have highlighted the relative immobility of local authority
tenants and manual workers (Hughes and McCormick, 1981, 1985, 1987). Local
authority tenants are more likely to be unemployed (Wadsworth, 1998), less likely
to move for job reasons and, if they do move, are more likely to move shorter
distances (Coleman and Salt, 1992). However, Forrest (1987) and Oswald (1996,
1998) argue that owner-occupation is a barrier to mobility and results in higher
levels of unemployment, a relationship to which Nickell (1998) also refers.
Manual workers typically have low levels of gross migration, and variations in
regional unemployment are largely attributed to the manual labour market. In
contrast, the non-manual labour market is more flexible with similar regional
unemployment rates, relatively high rates of regional mobility, and net migration
towards regions with high employment growth (Evans and McCormick, 1994).
We might thereforeexpect recent trends in the labourmarket, such as the increase
in the proportion of non-manual relative to manual workers, the rise in female
employment, part-time work and self-employment, and the shift to smaller
production units to have an impact on migration patterns (Green, 1992).
Recent events in the housing market have also influenced migration levels.
The Financial Services Act (1985) and the Building Societies Act (1986) resulted
in a highly competitive mortgage market, and it became easier for more people
to borrow a larger proportion both of the house value and of their income. This
contributed to a rise in household sector mortgage indebtedness from less than
25% of annual disposable income in 1980 to 75% in 1992 (Brookes et al., 1994).
The subsequent tightening of monetary policy saw a sharp increase in interest
rates, unemployment and the onset of recession, and a sustained period of
depressed housing market activity (Malpass and Murie, 1999). The number of
residential property transactions halved between 1989 and 1992, and house
prices fell sharply. Negative equity became widespread, with many households in
the situation where selling the property would not clear outstanding debt. The
number of households in negative equity increased from 230 000 in 1989 to 177
million in 1992, and over a million households were still in negative equity up to
1996 (Malpass and Murie, 1999).
Our results show that, although the unemployed account for only 10% of
movers, an unemployed individual is more likely to move than an otherwise
identical employee, particularly between regions. Further, a desire to move
motivated by employment reasons has the single largest effect on the probability
of moving between regions. Mortgage holders are found to have low levels of
labour market and residential mobility relative to those in other housing tenures.
370 RENE
#Scottish Economic Society 2002

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