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Home | Events Archive | The Socio-Economic Consequences of Housing Assistance

The Socio-Economic Consequences of Housing Assistance

  • Series
  • Speaker(s)
    Winnie van Dijk (University of Chicago, United States)
  • Field
    Empirical Microeconomics
  • Location
    Tinbergen Institute Amsterdam, Room 1.01
  • Date and time

    December 17, 2019
    16:00 - 17:15

This paper analyzes the effect of Europe’s largest public housing program on socio-economic outcomes for low-income households. Using lotteries for housing units in the Netherlands and data linking national registers to application choices, I show that the average move into public housing negatively affects labor market outcomes and proxies for neighborhood quality, and increases public assistance receipt. However, consistent with a model of labor supply responses to conditional in-kind transfers, average impacts miss substantial heterogeneity both across neighborhoods and, within neighborhood, across recipients. Moves
into high-income neighborhoods generate positive effects, which are driven by ‘upward’ moves made by individuals previously living in low- or middle-income neighborhoods. Lateral and ‘downward’ moves have the opposite effect. To evaluate whether these results generalize to non-recipients, I develop a model of
application behavior that utilizes panel data on application choices and exploits variation induced by the housing allocation mechanism. Using the model, I recover the distribution of heterogeneity that drives selection into and returns from lotteries, and estimate that selection on gains is limited. This suggests that
targeting public housing in high-income neighborhoods based on observable characteristics can increase economic self-sufficiency.