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Does social housing hinder the development of a high-skilled labor force?

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  • M.A.C. Kattenberg
  • W.H.J. Hassink

Abstract

Social housing is allocated to low-skilled workers using non-market mechanisms, which distorts the location decision of low-skilled and high-skilled workers. We investigate empirically whether social housing limits the possibilities for high-skilled workers to become resident of a city. Using unique longitudinal panel data for 40 cities in the Netherlands over the years 1981–2006, we find evidence that social housing reduces the percentage of high-skilled workers in a region. Ceteris paribus a ten percentage point increase of the rent-controlled housing stock is found to reduce the percentage of high-skilled workers in a region by 1.8 percentage points. These results suggest that social housing reduces the ability of cities to benefit from agglomeration economies or skill complementarity.

Suggested Citation

  • M.A.C. Kattenberg & W.H.J. Hassink, 2015. "Does social housing hinder the development of a high-skilled labor force?," Working Papers 15-11, Utrecht School of Economics.
    • Handle: RePEc:use:tkiwps:1511
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    1. Brueckner, Jan K. & Thisse, Jacques-Francois & Zenou, Yves, 1999. "Why is central Paris rich and downtown Detroit poor?: An amenity-based theory," European Economic Review, Elsevier, vol. 43(1), pages 91-107, January.
    2. Lung-Fei Lee, 2004. "Asymptotic Distributions of Quasi-Maximum Likelihood Estimators for Spatial Autoregressive Models," Econometrica, Econometric Society, vol. 72(6), pages 1899-1925, November.
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