In response to rapid urban growth, recent decades have been marked by substantial investment in residential housing across the developing world. This investment has been driven in part by a growing share of urban populations with informal and insecure residential arrangements (Marx et al. 2013). The scale of these policies leads to fundamental changes in city structure as people are reallocated across space. This spatial distribution has implications for employment and inequality (Tsivanidis 2021, Balboni et al. 2021). This study focuses on a large expansion of public housing in Ethiopia to address two primary questions: (1) What are the spatial spillovers from large condominium developments? (2) Does access to new condominiums push households into the formal sector?

The research design exploits the staggered implementation of new public housing in Addis Ababa, Ethiopia. The author leverages temporal variation in condominium openings and random lotteries for government-subsidized condominiums to identify how the opening of a new development may impact neighbouring areas and how winning a lottery for public housing may influence a household’s economic outcomes. The key neighbourhood-level outcomes of interest will be wages, firm concentration, firm sectoral distribution, and infrastructure access/quality. The authors combines administrative data from the Addis Ababa Housing Authority and individual-level wage data from the Private Organizations Employees Social Security Agency with a set of supplementary administrative datasets covering firms and measures of neighbourhood quality.

In Ethiopia, the research team has an ongoing relationship with the Addis Ababa Housing Authority who oversee the implementation of the condominium policy, for whom the results are expected to be particularly relevant. Since the policy is ongoing, there is scope for changes and differential targeting based on the results. Further, by focusing on downstream impacts like firm location and formalization, the authors hope to shed light on an aspect of the policy’s impact that has not been previously considered. Similar public investments in housing are currently being planned or implemented across Sub-Saharan Africa, and the findings are expected to be relevant in many of these contexts as well. This project can be viewed as expanding the scope of research into public housing in developing countries by considering their contribution to formalization and firm growth.

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