SMU SOE Seminar (Oct 10, 2018, 4-5.30pm): Social Housing and Income Segregation: Evidence from Social Housing Demolitions in France

Residential segregation matters as it may lead to a socially inefficient equilibrium because of peer effects, network effects, and geographical discrimination. This paper studies the effects of a policy aiming at decreasing social segregation by demolishing poor-quality social housing in the poorest neighborhoods. The point of these demolitions is to relocate the inhabitants in less poor neighborhoods. I use very geographically-precise income tax data together with variations in the actual year the policy started in each metropolitan area. I show that the policy led to an overall decrease in residential income segregation and that this effect is strengthened when the intensity of the demolitions increases. Finally, I study the mechanisms driving these results.