conceptualizer

September 28, 2007

Home ownership increases unemployment

The BoE MPC member Professor Danny Blanchflower points out that owning homes makes for a less mobile workforce and therefore tends to increase unemployment. Sounds plausible. So the implication is we make people more mobile by promoting home rental. Unfortunately people like to own their homes, so we could make business more mobile. It seems to me there was some promise to encourage businesses to move to the provinces quite some time ago by Tony Blair. It appears there was insufficient action on that one. I think some guaranteed periods of low and gradually increasing corporation tax combined with relocation advice might be a nice carrot. Perhaps a gradually increasing corporate tax rate for the highest density areas of business would provide a good stick.

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