Bombs, homes, and jobs: Revisiting the Oswald hypothesis for Germany

•We re-examine Oswald's hypothesis that homeownership increases unemployment.•We exploit WWII bombing of Germany as a source of identification.•Regional homeownership rates are significantly positively correlated with regional unemployment rates.•Result holds with year and region fixed effects, instrumentation, and a set of controls.

Andrew Oswald (1996) hypothesized that homeownership restricts commercial development and labour mobility, increasing unemployment. Instrumenting homeownership with WWII Allied bombing for a German regional panel, we find homeownership has a large positive effect on unemployment, and homeownership decreases labour mobility.