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Homeownership, Labor Supply, and Neighborhood Quality

Author

Listed:
  • Naomi Hausman
  • Tamar Ramot-Nyska
  • Noam Zussman

Abstract

This paper provides evidence on the external benefits of homeownership among low-income populations. A natural experiment in Israel generated large changes in neighborhood homeownership rates while holding fixed the residents and housing stock, two primary sources of bias in traditional estimates. When public housing tenants are given the opportunity to buy their units, buyers increase labor supply. Effects are felt in the neighborhood: when homeownership rises by 10 pp, neighborhood home prices rise 1.5–2 percent. Instrumenting for purchases using government discounts generates similar results. Results are relevant for policies using financial incentives to increase homeownership among low-income populations.

Suggested Citation

  • Naomi Hausman & Tamar Ramot-Nyska & Noam Zussman, 2022. "Homeownership, Labor Supply, and Neighborhood Quality," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 193-230, May.
    • Handle: RePEc:aea:aejpol:v:14:y:2022:i:2:p:193-230
    DOI: 10.1257/pol.20200177
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    Citations

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    Cited by:

    1. Adriana Camacho-González & Jorge Enrique Caputo-Leyva & Fabio Sánchez-Torres, 2022. "A new beginning: The effect of the free housing program on the quality of life of beneficiary households," Documentos CEDE 20303, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Laeven, Luc & Popov, Alexander & Sievert, Clara, 2024. "Is religion an inferior good? Evidence from fluctuations in housing wealth," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 705-725.
    3. Lagomarsino, Bruno Cardinale & Rossi, Martin A., 2024. "JUE insight: The unintended effect of Argentina's subsidized homeownership lottery program on intimate partner violence," Journal of Urban Economics, Elsevier, vol. 142(C).
    4. Stephen B. Billings & Adam Soliman, 2023. "The erosion of homeownership and minority wealth," CEP Discussion Papers dp1967, Centre for Economic Performance, LSE.
    5. Richard Disney & John Gathergood & Stephen Machin & Matteo Sandi, 2023. "Does Homeownership Reduce Crime? A Radical Housing Reform from the UK," The Economic Journal, Royal Economic Society, vol. 133(655), pages 2640-2675.
    6. Tamar Ramot-Nyska, 2023. "Changing Residential Mobility Considerations: The Case of Public Housing in Israel," Bank of Israel Working Papers 2023.15, Bank of Israel.
    7. Armentano, Vincent & McIntosh, Craig & Monestier, Felipe & Piñeiro-Rodríguez, Rafael & Rosenblatt, Fernando & Tuñón, Guadalupe, 2024. "Movin’ on up? The impacts of a large-scale housing lottery in Uruguay," Journal of Public Economics, Elsevier, vol. 235(C).

    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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