House prices, collateral, and self-employment


Journal Article

© 2015 Elsevier B.V. We show the importance of the collateral lending channel for small business employment over the past decade. Small businesses in areas with greater increases in house prices experienced stronger growth in employment than large firms in the same areas and industries. To identify the role of the collateral lending channel separately from aggregate changes in demand, we show that this effect is more pronounced in industries that need little start-up capital and in which housing collateral is more important. This increase is also present in manufacturing industries, particularly those that ship goods over long distances. In aggregate, the collateral lending channel explains 15-25% of employment variation.

Full Text

Duke Authors

Cited Authors

  • Adelino, M; Schoar, A; Severino, F

Published Date

  • January 1, 2015

Published In

Volume / Issue

  • 117 / 2

Start / End Page

  • 288 - 306

International Standard Serial Number (ISSN)

  • 0304-405X

Digital Object Identifier (DOI)

  • 10.1016/j.jfineco.2015.03.005

Citation Source

  • Scopus