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.
Hausman, Naomi, Tamar Ramot-Nyska, and Noam Zussman.
"Homeownership, Labor Supply, and Neighborhood Quality."
American Economic Journal: Economic Policy,
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Time Allocation and Labor Supply
Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
Housing Supply and Markets
Production Analysis and Firm Location: Government Policy