Risk and return: housing tenure and labour market adjustment after employment loss in the automotive sector in Southern Adelaide

Abstract

This paper examines the interaction between housing tenure and the propensity of displaced workers from the automotive sector to be employed one year to 18 months post-redundancy. It considers the ‘Oswald thesis’ that home ownership contributes to higher rates of unemployment in advanced economies and reviews this proposition using survey data from 314 households. The paper focuses on the experience of workers retrenched from the Lonsdale and Tonsley Park plants of Mitsubishi Motors Australia Ltd and, unlike some other research, finds general support for the Oswald thesis. It is suggested that a number of factors contribute to a lower rate of re-engagement with the formal labour market by home owners, including the absence of locally available employment, the high cost of transport to regions where employment is on offer and a strong sense of attachment to their region.

Keywords:

• Oswald thesis
• home ownership
• redundancy
• regional impacts

Acknowledgements

This paper reports on research funded by the Australian Research Council Linkage Grant LP0562288. The author would also acknowledge the assistance of Mrs Louise O'Loughlin in the typing of the tables and Mrs Cecile Cutler in proofreading the text.

Notes

1. There is some suggestion that the packages offered were less than completely voluntary as the closure of some areas of the assembly plant left workers with few options to continue their employment.

2. It is important to acknowledge that there is inevitably a degree of selection bias amongst the persons interviewed as part of our research into the impacts of redundancy in the automotive sector. This bias would encompass inclusion of persons more likely to stay within the region and their current home, while those willing to move in the period immediately after the redundancy may be excluded.

3. Of those employed part-time, two indicated that they would prefer to be working on a full-time basis and eight were not seeking full-time work.