Housing Market and Labor Mobility

Abstract

Labor mobility is determined by a whole set of different factors, but housing market is clearly one of the most important ones. Individuals do not make employment decisions without taking into account options of housing market. Economy constantly changes and diverse opportunities arise in different locations at different points of time. Badly functioning housing market can cause low labor mobility and restrain the ability of employers to match vacancies in specific locations. The issue of labor mobility is especially vital for developing countries. Synovate, a global marketing research company, conducted survey of labor mobility in Russia, Ukraine, Bulgaria and Serbia (Synovate, 2010). Results of the survey showed extremely low desire to relocate in Russia and Ukraine. If offered 1.5 times increase in salary, around 80 percent of respondents in Russia and Ukraine would still refuse to relocate, though in Bulgaria and Serbia only 50 percent of respondents would not change their location on this conditions. Moreover, imperfections in housing market were mentioned in this survey as one of the main reasons for low mobility in Russia and Ukraine. Different characteristics of housing market that can influence labor mobility are discussed in this report.