Abstract
This article examines the extent to which housing costs shape workers’ labor market trajectories. We provide empirical evidence showing that housing prices contribute to widening labor market disparities between high-skilled and low-skilled workers in French cities. We focus on two key outcomes: the probability of obtaining a permanent contract and the probability of being promoted. Our analysis uses an interurban framework and draws on rich French administrative data that track workers’ careers between 2010 and 2018, combined with detailed data on housing prices. To account for the non-random spatial sorting of individuals across cities, we implement a two-step approach à la Combes et al. (2008). This strategy is complemented by instrumental variable techniques that address endogeneity between housing and labor markets. Our results show that high housing prices exacerbate inequalities in access to permanent contracts between skill levels, an effect that is particularly pronounced among workers aged 35 and over and largely driven by low-skilled women. We do not find any significant effect on job promotions.