Current Research
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Some papers that are currently ongoing, with links to working paper versions where available, include:
Late starters or excluded generations? A cohort analysis of catch up in homeownership in England (IFS working paper version here)
with Renata Bottazzi and Thomas F. Crossley
Abstract England has very volatile house prices. Using survey data spanning multiple house-price cycles over nearly forty years, we document the association between house prices and homeownership at age thirty. We then use synthetic cohort methods to assess whether differences in early ownership rates persist in later life. We find that ownership rates at age thirty have varied substantially, with a significant negative association with prices. Measurement error problems – attenuation and other biases - complicate an analysis of the persistence of these differences in ownership. We use two methods to deal with this. Both indicate that cohorts with low ownership rates at age thirty close about 80% of the ownership gap by age forty.
Why do homeowners work longer hours? (IFS working paper version here)
with Renata Bottazzi and Hamish Low
Abstract This paper uses a structural model to address the question of why home-owners with large mortgage debt work longer hours than those without such debt. We consider whether this is due to lower net wealth or to capital market imperfections, including mortgage constraints that depend on current earnings and, therefore, labour supply choices. We show that the need to meet current mortgage commitments can generate the observed correlation, and this impact of current commitments arises from the institutional borrowing constraints. We also show that labour supply as a function of household debt is highly nonlinear: those with greater debt are more likely to face binding borrowing constraints and their labour supply is more variable.
The Effects of the Financial Crisis of the late 2000s on the Wealth, Consumption and Saving of Households in Italy (In progress)
with Renata Bottazzi and Serena Trucchi
Abstract We aim to investigate how wealth shocks due to the recent crisis have affected household economic outcomes, and particularly consumption, in Italy. We use data from the Bank of Italy’s Survey on Household Income and Wealth (SHIW), 2004-2010. We find evidence that there is variation in the data to allow us to identify a “wealth effect on household consumption” of the 2008 crisis. We also outline how we will now use very recently released data, and an instrumental technique, to deal with the endogeneity between consumption and wealth changes.