Suzy Khimm points out an interesting study from the UK’s Spatial Economics Research Centre:
Our fixed-effects estimates show that purchasing a house reduces the likelihood of starting a business by 20-25%. … This result is driven by homeowners with mortgages and persists for several years after entering homeownership. … We argue that this finding can be rationalized by the fact that homeowners typically have to overinvest in housing (Brueckner, 1997; Flavin and Yamashita, 2002) and therefore cannot adequately diversify their portfolio. As a consequence, individuals choose not to start-up their own business venture at the same time as becoming homeowners since this would imply taking on significant additional risk. Stated differently; investments in homeownership crowd out entrepreneurial engagement.
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