Unpacking Neighborhood Effects: Experimental Evidence from a Large-Scale Housing Program in Brazil

67 Pages Posted: 7 May 2023

See all articles by Carlos Belchior

Carlos Belchior

University of Zurich

Gustavo Gonzaga

Pontifical Catholic University of Rio de Janeiro

Gabriel Ulyssea

University of Oxford - Department of Economics

Abstract

This paper investigates the impacts of neighborhoods on the economic outcomes of adults. We exploit one of the world's largest housing lottery programs and administrative data linking lottery registration, formal employment, and access to social programs in Brazil. Receiving a house has positive impacts on housing quality and reduces household expenditures but has negative effects on beneficiaries' neighborhood characteristics. On average, the program has a negative impact on the probability of being formally employed but no effect on the quality of jobs. Poorer individuals, however, experience better formal employment outcomes and lower welfare dependency. We find no differential impacts by distance to beneficiaries' previous homes or jobs. Leveraging a double-randomization design to allocate houses, we show that there are significant differences in effects across neighborhoods and we propose a framework to estimate the relative importance of potential underlying mechanisms. Network quality, amenities and crime play a very limited role, while labor market access explains 82-93% of the observed differences in neighborhood effects.

Keywords: neighborhood effects, housing programs, labor markets

JEL Classification: H75, I38, O18, R23, R38

Suggested Citation

Belchior, Carlos and Gonzaga, Gustavo and Ulyssea, Gabriel, Unpacking Neighborhood Effects: Experimental Evidence from a Large-Scale Housing Program in Brazil. IZA Discussion Paper No. 16113, Available at SSRN: https://ssrn.com/abstract=4440250 or http://dx.doi.org/10.2139/ssrn.4440250

Carlos Belchior (Contact Author)

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Gustavo Gonzaga

Pontifical Catholic University of Rio de Janeiro ( email )

225 - Gávea
Rua Marquês de São Vicente
Rio de Janeiro, Rio de Janeiro 22451-900
Brazil

Gabriel Ulyssea

University of Oxford - Department of Economics ( email )

10 Manor Rd
Oxford, OX1 3UQ
United Kingdom

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