Homeownership and Entrepreneurship – This work is part of the research programme of the independent UK Spatial Economics Research Centre funded by a grant from the Economic and Social Research Council (ESRC), Department for Business, Innovation & Skills (BIS) and the Welsh Assembly Government. Philippe Bracke, Christian Hilber, Olmo Silva, April 2012
“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 data set 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 homeo wnership. 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.”
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