Graduation Year

2025

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Nayana Bose

Reader 2

Nicholas Kacher

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Terms of Use for work posted in Scholarship@Claremont.

Abstract

This study aims to provide an empirical analysis of the relationship between housing affordability and labor market dynamics across 18 of the largest U.S. Metropolitan Statistical Areas (MSAs) over a 19 year period. Using data from The House Price Index (HPI) and the Job Openings and Labor Turnover Survey (JOLTS), I run a fixed effects panel regression to examine how changes in housing prices influence three labor market variables: ‘job openings’, ‘hires’, and their difference (‘hires - job openings’). This approach allows me to examine the relationship between high housing prices and labor market conditions across these MSAs over time. My results suggest that there is a positive relationship between changes in the HPI and labor market outcomes; as HPI rises, ‘job openings’ and ‘hires’ both increase, while the difference between the two ‘hires - job openings’ decrease, pointing to a tighter labor market within these areas. These results offer insights into why firms may be facing challenges in finding workers and why job positions are remaining unfilled. This study also opens the door for further discussions or research studies relating to housing affordability, migration trends, income inequality, and reverse causality.

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