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Research Paper – Homeownership and Entrepreneurship

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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