When education policy and housing policy interact: can they correct for the externalities?

Yifan Gong and Charles Leung

No GRU_2019_031, GRU Working Paper Series from City University of Hong Kong, Department of Economics and Finance, Global Research Unit

Abstract: A simple spatial equilibrium model with the peer group effect and local public finance can match several stylized facts of the labor market and housing market in the United States. Our counter-factual policy analyses generate further insights. First, the welfare of households can change as the government varies the location of public housing units with a neighborhood. Second, even though the public housing policy and housing voucher program deliver similar results at the household level, they are different as the former tends to benefit the offspring more, while the latter is the reverse. Third, combining school finance consolidation policy with public housing policy can lead to a Pareto improvement. Unfortunately, a policy that can benefit all agents, in the long run, may not be implemented as it can hurt some agents in the short run.

Keywords: school finance consolidation; public housing; housing voucher; endogenous sorting mechanism; short-run rigidity versus long-run flexibility (search for similar items in EconPapers)
JEL-codes: H00 I20 R00 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2019-12-06
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (1)

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https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232019-031%20Leung.pdf (application/pdf)

Related works:
Journal Article: When education policy and housing policy interact: Can they correct for the externalities? (2020)
Working Paper: When education policy and housing policy interact: Can they correct for the externalities? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:cth:wpaper:gru_2019_031

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