Enabled to Work: The Impact of Government Housing on Slum Dwellers in South Africa

February 1 2018

Do informal housing conditions constrain labour supply? I estimate the effect of receiving a free formal house, under South African government’s housing program, which has given away over 3 million housing units in the last 24 years. Using four waves of household panel data from Cape Town and geographical data on the location of large housing projects, I exploit a natural experiment whereby households living close to projects were first in line to get them to instrument for selection into the programme. I use projects that were planned and approved, but never actually built, to deal with non-random placement of housing projects. Housing has a significant positive effect on household earned income. This effect is driven by increased employment rates among female members of these households. I present suggestive evidence that formal housing alleviates the demands of work at home for women, which leads to increases in labour supply to wage paying jobs.

Revise and Resubmit, Journal of Urban Economics

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Simon Franklin is a Postdoctoral Research Economist at LSE. His research focuses on Development, Labour, and Urban Economics.