Housing program and social conditions impact: Evidences from Minha Casa Minha Vida program lotteries in Brazil

Produced by: 
University of Sao Paulo
Available from: 
December 2019
Paper author(s): 
André Luis Squarize Chagas
Guilherme Malvezzi Rocha
Topic: 
Demographic Economics - Migration
Year: 
2020

Housing policies to improve the quality of life of the poorest have been employed for a long time. In developing countries urbanization has increased the number of slums, supporting the creation of housing programs, like Minha Casa Minha Vida (MCMV) program, launched in 2009 in Brazil. The program intend to provide better housing conditions to poor family. To reduce the construction cost the houses are built in surround area of the cities, far from business center. In this paper, we took advantage of a randomly selection of families in Rio de Janeiro (one of the most important cities in Brazil) and São José do Rio Preto cities (a big city in the countryside of São Paulo state, Brazil) to evaluate the it impact on social conditions, mainly related to the employment and income. By combining two administrative databases we were able to measure the changes in the labor market for both groups, drawn and not drawn. The first conclusion is even with a random selection criteria, as the lottery, the program badly selected the beneficiary families, benefiting only one least linked to the labor market. Individuals with better job conditions choose remains the current house, independently of it structural condition or the neighborhood. To the beneficiary, the program negatively affects the labor supply, reducing the likelihood that the beneficiary will be formally employed. Also, the program increased the proportion of families receiving the cash income transfer. This work is one of the first articles to analyze microdata from MCMV, providing an important measure of the program’s impact.

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