Like Father Like Son? Social Engineering and Intergenerational Mobility in Housing Consumption
46 Pages Posted: 27 Dec 2021 Last revised: 26 Sep 2023
Date Written: August 25, 2023
Abstract
Using Singapore’s large-scale public housing program as a quasi-natural experiment, we demonstrate that affordable public housing significantly enhances intergenerational mobility in housing consumption for families with lower socioeconomic status. By matching 147,560 parent-child pairs with housing transaction prices from 1995 to 2018, we identify three intergenerational mobility patterns: upward mobility for children from families with lower socioeconomic status, high persistence for children born to higher status parents, and downward mobility for the rest. Using the introduction of a new public housing scheme to construct a Difference-in-Differences strategy, we estimate that children born in disadvantaged families but whose parents benefit from affordable public housing have a 11.2% higher likelihood of surpassing their parents’ housing status. A possible mechanism for this effect lies in an alleviation of budget constraints, which in turn facilitates greater investment in the human capital of children. Our results provide insight into a new pathway to enhance intergenerational mobility and ameliorate inequality through the provision of affordable housing.
Keywords: housing consumption, intergenerational mobility, social engineering programs, human capital
JEL Classification: E24, J62, J68
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