Seminar in Empirical Microeconomics - The Labor Market Consequences of Living in Social Housing

Donnerstag, 13. Juli 2023
12 bis 13:15 Uhr


Veranstaltet von
Chair of Economic Policy

Vortragende Person/Vortragende Personen:
Wolfgang Dauth (IAB & University of Bamberg)

The Labor Market Consequences of Living in Social Housing

(with Andreas Mense and Matthias Wrede)

Abstract: In this paper, we investigate the labor market consequences of living in social housing. We develop a new and unique administrative data set of individual labor market biographies linked to social housing addresses in five German cities, allowing us to follow individuals over almost 20 years after having moved into the social housing unit. Using an event study design, we find that access to social housing increases total labor income, daily wages, and job stability, while it decreases unemployment hazards. We explain these results by three complimentary mechanisms: labor market access, residential stability, and an income effect. First, the social housing units are considerably closer to the city center and better connected to the urban labor market, as compared to the last address prior to moving into social housing, and the estimated treatment effects are more pronounced in cases where labor market access increased due to the move. Second, the high stability of the residential arrangement provided by social housing in Germany – both in terms of housing costs and the location – may induce residents and firms to invest in specific human capital, and it may reduce labor market frictions associated with ‘involuntary’ moves. Third, the rent subsidy may allow social housing residents to invest in their human capital. Finally, we exploit differences in neighborhood quality across social housing addresses to show that the treatment effects are more pronounced when the neighborhood quality inside and around the social housing building is higher.