Like Father Like Son? Social Engineering and Intergenerational Mobility in Housing Consumption

46 Pages Posted: 27 Dec 2021 Last revised: 26 Sep 2023

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Yi Fan

National University of Singapore (NUS) - Sustainable & Green Finance Institute (SGFIN)

Wenlan Qian

National University of Singapore - NUS Business School

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate

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

Suggested Citation

Agarwal, Sumit and Fan, Yi and Qian, Wenlan and Sing, Tien Foo, Like Father Like Son? Social Engineering and Intergenerational Mobility in Housing Consumption (August 25, 2023). Available at SSRN: https://ssrn.com/abstract=3993882 or http://dx.doi.org/10.2139/ssrn.3993882

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Yi Fan (Contact Author)

National University of Singapore (NUS) - Sustainable & Green Finance Institute (SGFIN) ( email )

Singapore

Wenlan Qian

National University of Singapore - NUS Business School ( email )

15 Kent Ridge Drive
Singapore 117592, 119245
Singapore
(65) 65163015 (Phone)

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate ( email )

15 Kent Ridge Drive
NATIONAL UNIVERSITY OF SINGAPORE (MOCHTAR RIADY BU
Singapore 117566, 119245
Singapore
06565164553 (Phone)

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