Seminar: "Sorting or incentives? The effect of housing market tenure type on wages"

Time: 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Mark Kattenberg (CPB)

Discussant: Stefan Groot (VU)

Language: English

Registration:  Please register by sending an email to seminars@cpb.nl.

Abstract subject
On average, workers in owner-occupied housing earn 25 percent higher wages compared to tenants of social housing. This wage differential might reflect the sorting mechanism as described in the economic framework. In contrast, as both homeownership and living in social housing reduce labor mobility, wages might be affected by housing market tenure. This paper tests whether homeowners and tenants of social housing earn different wages compared to tenants of private rental housing. We do so  using a large panel for the years 2006 through 2008 based on administrative records and IV estimation. This enables controlling for the sorting of low-skilled workers into social housing. It follows from the analysis that conditioning on worker skill is very important: if one controls for sorting according to skill, there is no evidence that homeowners or tenants living in social housing earn different wages compared to tenants of private housing.

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