Homeownership, Labor Supply, and Neighborhood Quality

Naomi Hausman, Tamar Ramot-Nyska and Noam Zussman

American Economic Journal: Economic Policy, 2022, vol. 14, issue 2, 193-230

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.

JEL-codes: H24 I38 J22 R21 R23 R31 R38 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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DOI: 10.1257/pol.20200177

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