A New Beginning : The Effect of the Free Housing Program on the Quality of Life of Beneficiary Households

This paper analyzes the effect of the Free Housing Program (PVG) on the well-being of beneficiary households. This program is an initiative of the Colombian Government to provide free houses to the most vulnerable households in the country. To estimate causal impacts of the program, we exploit that 38% of the beneficiaries were selected through housing lotteries. We show that most of recipients still reside in the houses provided in the program (5-6 years after the housing lotteries), which have adequate conditions of structure, space, and access to public services. Also, we show that program improves the labor conditions of beneficiary households, either through greater labor participation (in women), or by changing the type of work or economic sector (in men) and even earning more income (both). As a result of the previous impacts, the beneficiary households were able to restructure their expenses, acquire more durable goods, save more money, and escape extreme poverty. The main mechanism that explains these results is that the beneficiaries were relocated to places with a greater provision of public goods, closer proximity to complementary services and more economic activity