Housing supply and the interaction of regional population and employment

Wouter Vermeulen and J. van Ommeren

No 65, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: Housing markets may significantly affect the relationship between regional population and employment, if housing supply is not fully accommodative to demand. We analyse the relationships between housing supply, regional population and employment empirically in a three-equation dynamic model. Annual regional panel data are used for the Netherlands, where a strong tradition of spatial planning exists. We find that net internal migration is strongly determined by housing supply, whereas employment growth has no statistically significant impact. Growth of the housing stock is only moderately affected by population and employment, possibly as a result of restrictive spatial policies. Employment adjusts substantially towards a long-run relationship with the regional population. The analysis further indicates that labour markets drive this long-run adjustment more than local consumer demand. Hence, people follow houses rather than jobs, and jobs follow people in the long run.

JEL-codes: J23 R11 R23 (search for similar items in EconPapers)
Date: 2006-05
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:65

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