Conference Paper
Local Employment Effects of Affordable Housing Construction: Evidence from Iran
No.
ERF30_68
Publisher
ERF
Date
March, 2024
This paper estimates the causal impact of a large-scale public housing construction project, which is called Mehr housing project on employment at the district level. The program focused on building stimulus affordable housing projects for low-and middle- Income households, making it possible to use it as an exogenous shock on local employment. We used generalized difference-in-differences strategy to estimate the impact on local labor markets, comparing how employment evolved differentially in places with different levels of Mehr housing construction. Our results show that each affordable housing project, increase local employment in construction sector by 5 numbers and 230 hours per week. One of the reasons that the effect is smaller than one may expect, is that we show these public housing projects crowd-out private housing projects by 50 percent. However, when testing for general equilibrium effects on local employment, we find effects close to zero and even negative, with very wide confidence intervals across all specifications. Although Mehr project was an intervention significant enough to have a sizable impact on the construction sector in districts with low mobility, these findings suggest that the local variation in affordable housing construction was too small relative to baseline regional volatility to detect a “local multiplier” effect impacting jobs outside of construction. Furthermore, there is a transition from non-construction jobs to construction sector which lead to increase in employment in construction sector but without any real effect on local employment.
Authors
Saeed Tajrishy
PhD Candidate, Sharif University
Research Fellows
Mohammad Vesal
Associate Professor, Graduate School of Management and...