Brown Bag seminar in Economics | Viking Waldén

We study the effect of housing, neighborhoods, and tenancy on earnings and family formation. Using data on rent-controlled apartments allocated sequentially based on waiting time in Stockholm, Sweden, we compare applicants to the same apartment who have similar waiting time, but differ only in their assigned priority for the apartment. Receiving tenancy makes applicants move to smaller apartments in new neighborhoods and changes the characteristics of the neighborhoods where they live. This effect differs depending on where the apartment is located -- receiving tenancy in a poor neighborhood induces moves to poorer neighborhoods than applicants otherwise would have lived in, while receiving tenancy in rich neighborhoods has the opposite effect. Tenancy in a rent-controlled apartment, however, leaves labor supply and family formation unaffected regardless of where the apartment is located.