Moving to Opportunity or Isolation? Network Effects of a Slum Relocation Program in India

A" housing" lottery" in" a" large" Indian" city" provided" 110" out" of" 497" participants the" opportunity" to" move" out" of" a" slum" and" into" improved" housing" on" the" city's" periphery." Fourteen"years"after"housing"assignment,"relative" to"lottery"losers,"winners"report"better" housing"conditions"farther"from"the"city"center,"but"no"change"in"family"income"or"human" capital."Winners"also"state"increased"isolation" from" family"and"caste"networks"and"lower" access" to" informal" insurance." In" particular," they" are" significantly" less" likely" to" know" someone"they"can"rely"on"for"borrowing"needs"and"report"fewer"informal"transfers"in"the" event" of" shocks." We" also" observe significant" program" exit:" 34%" of" winners" never" even" moved" into" the" assigned" housing" and" 32%" eventually" exited" the" colony" to" be" closer" to" family" and" the" city" center." Our" results" suggest" that" the" benefits" of" improved" suburban" housing"were"offset"by"its"drawbacks"in"the"form"of"destruction"of"social"capital,"pointing"to" the"importance"of"considering"social"networks"when"designing"housing"programs" for" the" poor.