To federal policymakers wringing their hands over whether sunken home prices are a ball-and-chain on Americans' ability to move in search of work, the Boston Federal Reserve has this message: Stop torturing yourselves.
Boston Fed researchers have published a paper that debunks as myth the notion that but for their inability to responsibly get out from under a house that is worth less than what they paid for it, more Americans would be working and the jobless rate would be lower.
Researchers Alicia Sasser Modestino and Julia Dennett say they analyzed IRS data on state-to-state migration between 2006 and 2009 for their thesis.
Using what in research-speak is known as a logistic regression framework, the study authors report finding evidence of "house lock'' in lowering mobility but not enough to impact the unemployment rate.
Indeed, Modestino and Dennett say their research found that, taking all factors into consideration, eliminating the impediments of negative home equity would only have cut the jobless rate to 9 percent in 2009, instead of the prevailing 9.3 percent.