Publication > Part III: Policies for the future > CC3
In Cosmopolitan Centres, where flexibility of workers is needed, institutional reform in favour of the rental market should be seriously considered.
Homeowners are hit twice if the specialisation of Cosmopolitan Centres is negatively hit. First, many workers become unemployed and firms shut down their vacancies. Workers will thus have to move to another city to find a job. Second, during this downturn, many workers are going to sell their house, which severely reduces the value.
Workers who rent their house are better off; they simply terminate the tenancy.
Cosmopolitan Centres (Labour market)
Mobility of workers depends both on labour market institutions and on the regulation of the housing market. The housing markets may either support or hamper workers in responding to changing circumstances.In Cosmopolitan Centres, where flexibility of workers is needed, institutional reform in favour of the rental market should be seriously considered.
Homeowners are hit twice if the specialisation of Cosmopolitan Centres is negatively hit. First, many workers become unemployed and firms shut down their vacancies. Workers will thus have to move to another city to find a job. Second, during this downturn, many workers are going to sell their house, which severely reduces the value.
Workers who rent their house are better off; they simply terminate the tenancy.