A New Beginning: The Effect of the Free Housing Program on the Quality of Life of Beneficiary Households

60 Pages Posted: 22 Jul 2022

See all articles by Adriana Camacho

Adriana Camacho

Universidad de los Andes, Colombia - Department of Economics

Jorge Enrique Caputo-Leyva

Universidad de los Andes, Colombia

Fabio Sánchez

Universidad de los Andes, Colombia - Department of Economics

Date Written: July 19, 2022

Abstract

This paper analyzes the effect of the Free Housing Program (PVG) on the well-being of beneficiary households. This program is an initiative of the Colombian Government to provide free houses to the most vulnerable households in the country. To estimate causal impacts of the program, we exploit that 38% of the beneficiaries were selected through housing lotteries. We show that most of recipients still reside in the houses provided in the program (5-6 years after the housing lotteries), which have adequate conditions of structure, space, and access to public services. Also, we show that program improves the labor conditions of beneficiary households, either through greater labor participation (in women), or by changing the type of work or economic sector (in men) and even earning more income (both). As a result of the previous impacts, the beneficiary households were able to restructure their expenses, acquire more durable goods, save more money, and escape extreme poverty. The main mechanism that explains these results is that the beneficiaries were relocated to places with a greater provision of public goods, closer proximity to complementary services and more economic activity.

Keywords: free public housing, poverty, employment, income

JEL Classification: I38, J22, O18, R28, R31

Suggested Citation

Camacho, Adriana and Caputo-Leyva, Jorge Enrique and Sánchez Torres, Fabio, A New Beginning: The Effect of the Free Housing Program on the Quality of Life of Beneficiary Households (July 19, 2022). Documento CEDE No. 26, Available at SSRN: https://ssrn.com/abstract=4169033 or http://dx.doi.org/10.2139/ssrn.4169033

Adriana Camacho (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

Jorge Enrique Caputo-Leyva

Universidad de los Andes, Colombia ( email )

Carrera Primera # 18A-12
Bogota, DC D.C. 110311
Colombia

Fabio Sánchez Torres

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia
+57 1 332 4495 (Phone)
+57 1 332 4492 (Fax)

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