Decades of promoting homeownership may have stifled the U.S. economy.
That's the implication of a new study, which found that owning a home makes people less likely to become entrepreneurs.
The study, by Philippe Bracke, Christian Hilber, and Olmo Silva, economists at the Spatial Economics Research Centre in London, found that homeowners in the U.K. are less likely to become entrepreneurs because their mortgage is so risky that they are unwilling to take on more risk by starting a new business.
The U.S. government has been promoting homeownership for decades, and it's worked. More than 65 percent of all Americans are homeowners, according to the Census.
The study's authors write that homeowners "typically have to overinvest in housing" at the expense of entrepreneurship. This is particularly true for homeowners with a mortgage.
The study found that homeownership reduces "genuine entrepreneurship" in particular: that is, entrepreneurship that is in professional work or involves hiring other employees. That is an important point to distinguish, since the vast majority of U.S. businesses have no employees, according to the Census. Among those 21 million nonemployer businesses, millions of people have been forced to do odd jobs since they cannot find work.
Many U.S. government policies, including the mortgage tax deduction, create incentives to buy a home. Homeownership advocates argue that the incentives are good for everyone because homeowners are more invested in their communities.