It is often found that the impact of home ownership on the hazard rate for leaving unemployment is positive, indicating that home ownership helps workers to leave unemployment for a paid job. However, little emphasis has been given to how such a relationship can be explained. This paper estimates a structural-form model that allows for self-selection into home ownership and the risk of home owners losing their property during a spell of unemployment. We find a substantial amount of self-selection using indirect inference based on a mixed proportional hazards-rate model and find virtually no impact of home ownership on individual labor market performance.
