Winnie van Dijk, University of Chicago. "The socio-economic consequences of housing assistance"
Department seminar. Winnie van Dijk is a postdoctoral Research Fellow at the University of Chicago Becker Friedman Institute. She will present the paper: "The socio-economic consequences of housing assistance".
Winnie van Dijk
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.