Unemployment rate varies markedly with respect to the residential situation.14 Whatever
their location, public housing renters are more often unemployed than others: one aim of the
public housing sector is to provide individuals in a poor economic situation with affordable hous-
ing. Still, public housing renters in deprived neighborhoods are by 42% more often unemployed
than other public housing renters. Individuals with other housing tenures display a similar pic-
ture: their unemployment rate in deprived neighborhoods is by about 50% higher than in other
neighborhoods.
This differenciated unemployment rate of public housing renters depending on neighbor-
hood type raises three interpretations. First, this can be the result of the variation in public
housing rents depending on the location in the city. Although rents in the public sector are
administrated, they vary in space and the most successful individuals on the labor market are
likely to be able to afford the best-located public housing units. Second, this could account for
peer effects that increase individual difficulties on the labor market when they live in a deprived
neighborhood. Third, it could be the consequence of a self-selection effect, such that people less
likely to find a job sort themselves in these neighborhoods. Our econometric analysis is intended
to disentangle these different mechanisms.
4 Results
In this section, we present in turn results of simple probits, results of the simultaneous probit
model, neighborhood and public housing predicted effects, and policy simulations.
4.1 Probit estimates
Table 4 contains marginal effects estimated from three simple probits: being a renter in the
public sector, being located in a deprived neighborhood, and a probit of unemployment which is
estimated in turn with and without the two residential variables. Demographic variables take a
large part in determining the probability of being accommodated in a public housing. Younger
households (as reflected by the spouse’s age) and those with at least three children are more
likely to rent a public housing unit, which is in line with assignment rules of public housing
offices. For instance, having four children or more increases by 12 points the probability to be in
a public housing unit. Individuals (or their spouse) of foreign nationality or, to a lower extent,
14 Remark that the overall unemployment rate is different from the rate displayed in Table 2 due to the sample
definition.
13