The Negative and Persistent Impact of Social Housing on Employment

• Published in: Annals of economics and statistics 2018-06 (130), p.133-166
• Main Authors: Stéphane Gregoir, Tristan-Pierre Maury
• Format: Article
• Language: English
• Subjects: Cost estimation models; Employment; Home ownership; Homes; Housing; Labor markets; Social events; Standard error; Tenants; Unemployment
• ISSN: 2115-4430; 1968-3863
• DOI: 10.15609/annaeconstat2009.130.0133

We assess whether and how much social housing may contribute to the dynamics of unemployment. We propose an original model on the joint dynamics of individual home and labor market positions estimated with UK panel data that allows for idiosyncratic heterogeneity and state dependence. Our results provide significant evidence of cross-causality effects between home tenure and the labor market: we find a higher transition rate into social housing for unemployed or inactive household heads, and a lower probability of getting employed for social tenants ceteris paribus. We compare two groups of household heads living in the private sector: the employed and the jobseekers. We estimate their probability of being employed in the medium term. The indirect role of transitions to social housing appears quantitatively large and significant. Indeed, almost 20% of the gap in employment probability in the medium term between the two groups can be attributed to a higher likelihood of living in the social sector for the jobseekers. JEL Codes: R23, R31, C33, C35. Keywords: Social Housing, Unemployment, Path Analysis, Multivariate Dynamic Logit.