Does public housing occupancy increase unemployment?

Claire Dujardin (1) , Florence Goffette-Nagot (2)

1 CORE - Center of Operation Research and Econometrics [Louvain]
2 GATE - Groupe d'analyse et de théorie économique

This paper shows that living in public housing has no effect on the probability of being unemployed in France, once we account for the endogeneity of public housing. We estimate a simultaneous probit model of unemployment and public housing. On a first sample for Lyon, we instrument public housing with the gender composition of children. On a second national sample, the instrument is the city-level share of public housing. Both samples yield the same conclusion, which we justify by showing that a small amount of selection on unobservables is enough to eliminate the positive effect found in “naive” estimates.

Mots clés: Public housing; unemployment; simultaneous probit models; instrumental variables

Domaines: Economies et finances

Claire Dujardin, Florence Goffette-Nagot. Does public housing occupancy increase unemployment?. Journal of Economic Geography, 2009, 9, pp. 823-851. ⟨10.1093/jeg/lbp002⟩. ⟨halshs-00436679⟩