Open Access Journal Article

Testing the Oswald hypothesis with Australian census data 2001-2016

by Megha Raut a  and  W. Robert J. Alexander b,* orcid
a
Department of Industry Tourism and Trade, Northern Territory Government, Darwin, Australia
b
School of Business and Creative Industries, University of the Sunshine Coast, Brisbane, Australia
*
Author to whom correspondence should be addressed.
EAL  2023 2(1):17; https://doi.org/10.58567/eal02010007
Received: 22 March 2023 / Accepted: 3 May 2023 / Published Online: 4 May 2023
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Abstract

The Oswald hypothesis is that home ownership reduces mobility and through that channel results in poorer labor market outcomes. There has been only limited previous evidence on the Australian case. Here we use data from the first four Australian censuses of the twenty-first century, aggregated at the smallest geographical areas for which statistics are released. We propose testing the Oswald hypothesis by estimating the effect of home ownership on the full-time employment rate. Modelling the unemployment rate, as is often done in testing the hypothesis, produces implausible results with respect to the control variables, most likely due to the limitations of the official definition of unemployment. We find that, in modelling the full-time employment rate, the control variables for educational and demographic factors have the theoretically plausible effects, while variables capturing rates for both outright home ownership and with mortgage home ownership are positively related to full-time employment rates, with the effect of the former stronger than the latter. Our findings strongly contradict the Oswald hypothesis.

Keywords: Home ownership; employment; Oswald hypothesis; Australia; census data;
Copyright: © 2023 by Raut and Alexander. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.