American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
An Equilibrium Analysis of the Effects of Neighborhood-Based Interventions on Children
American Economic Review
(pp. 4476–4522)
Abstract
This paper studies housing vouchers and urban redevelopment programs by incorporating neighborhood effects into a general equilibrium overlapping-generations model with endogenous location choice and child development. We calibrate the model using US data and estimate impacts of large-scale implementations of rental voucher and place-based subsidy policies. Our core finding is that vouchers generate long-run welfare gains by reducing inequality and generating skill improvements that offset higher taxation and other GE effects. Although vouchers lead to larger welfare gains on average, we find that place-based subsidies may be preferable in cities with constrained housing supply.Citation
Chyn, Eric, and Diego Daruich. 2025. "An Equilibrium Analysis of the Effects of Neighborhood-Based Interventions on Children." American Economic Review 115 (12): 4476–4522. DOI: 10.1257/aer.20231679Additional Materials
JEL Classification
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- J13 Fertility; Family Planning; Child Care; Children; Youth
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R31 Housing Supply and Markets
- R38 Production Analysis and Firm Location: Government Policy