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There Is No Free House

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  • Picarelli, Nathalie

Abstract

This paper estimates the effect of a housing relocation program on the labor supply and living conditions of low-income households across major cities in South Africa. Using panel microdata collected between 2008 and 2014, it exploits the arbitrary eligibility rules of the policy with a fuzzy regression discontinuity design to obtain reduced form estimates. There are three main findings. First, in the short-term of 2 to 4 years following relocation, the labor supply of recipient households decreases, driven mostly by a reduction of female hours. Second, the large increase in distance (km) to economic opportunities seems to be an important factor behind the decline, directly or indirectly through family shifts in earning strategies. Finally, evidence is limited regarding improvements in housing and neighborhood quality. Overall, there is no clear indication that the net welfare effect of relocation is positive.

Suggested Citation

  • Picarelli, Nathalie, 2019. "There Is No Free House," Journal of Urban Economics, Elsevier, vol. 111(C), pages 35-52.
    • Handle: RePEc:eee:juecon:v:111:y:2019:i:c:p:35-52
    DOI: 10.1016/j.jue.2019.04.002
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    2. Zhou, Zhengyi, 2022. "The effects of state-led relocation on labor market participation: Evidence from China," China Economic Review, Elsevier, vol. 73(C).
    3. Kumar, Tanu, 2021. "The housing quality, income, and human capital effects of subsidized homes in urban India," Journal of Development Economics, Elsevier, vol. 153(C).
    4. Adriana Camacho-González & Jorge Enrique Caputo-Leyva & Fabio Sánchez-Torres, 2022. ""Un nuevo comienzo": El impacto del Programa Vivienda Gratuita sobre la calidad de vida de los hogares beneficiarios," Documentos CEDE 20077, Universidad de los Andes, Facultad de Economía, CEDE.
    5. Manea, Roxana Elena & Piraino, Patrizio & Viarengo, Martina, 2023. "Crime, inequality and subsidized housing: Evidence from South Africa," World Development, Elsevier, vol. 168(C).
    6. Posada, H. M. & García, A. F. & Londoño, D, 2022. "The external effects of public housing developments on informal housing: The case of Medellín, Colombia," Documentos de Trabajo 20416, Universidad del Rosario.
    7. Augustinas Maceika & Andrej Bugajev & Olga R. Šostak, 2019. "The Modelling of Roof Installation Projects Using Decision Trees and the AHP Method," Sustainability, MDPI, vol. 12(1), pages 1-21, December.
    8. Bradlow, Benjamin H. & Polloni, Stefano & Violette, William, 2023. "Public housing spillovers: Evidence from South Africa," Journal of Urban Economics, Elsevier, vol. 134(C).

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    More about this item

    Keywords

    Low-cost housing; Labor supply; Housing conditions; Urban areas; South Africa;
    All these keywords.

    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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