Labour Market and Housing Unavailability: Implications for Regions Affected by Coal Mining

Abstract

Homeownership is becoming less affordable, even for middle-income households. This trend can also be observed in the Czech Republic, where the price to income ratio has been growing continuously during the last three decades in all major cities, Prague-the capital-over speeding this trend. This paper identifies key features of recent housing market development in the Czech Republic. We argue that the Czech case is relevant from an international perspective as there is an obvious lock-in effect enforced by either historical or current policy circumstances. Using unique data from EVAL software designed for mining data from sale and rental advertisements, we show some interesting trends in the housing market with implications to labour mobility and structural unemployment. The preference for property ownership in combination with the reduction of the coal industry causes a reduction in the mobility of the labour force and thus a reduction in the population's purchasing power, especially in localities with structural unemployment. The results show a significant dependence between real estate prices and labour mobility. These results are also important for regions affected by coal mining, as these are the less attractive regions in the Czech Republic. The article aims to offer a deeper insight into the relationship between housing ownership, cross-regional migration and structural unemployment and suggests policy solutions to improve housing availability.