Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229088 
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2474
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
Using a dedicated set of questions in the 2014 Luxembourg Household Finance and Consumption Survey (LU-HFCS), we show that a substantial share of households contributes their own labour to the acquisition of their main residence. These contributions help households faced with credit constraints, since they reduce the need for external financing. We develop a simple theoretical model and show that own labour contributions decrease with the level of financial resources available, while they increase with the mortgage interest rate. These theoretical results are supported by empirical analysis, which also shows that own labour contributions vary by household characteristics (age, gender, profession) and by type of dwelling (house, apartment).
Subjects: 
Borrowing constraints
down payment
own labour
sweat equity
homeownership
household
survey
JEL: 
D14
E43
G21
R21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4391-8
Document Type: 
Working Paper

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