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Inter-generational effects of titling programs: physical vs. human capital

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  • Nestor Gandelman

    (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Economía)

Abstract

Human capital investment may be affected by programs aimed at giving legal ownership titles to occupants of land; these are called "land titling programs". Titling is associated with an income (or wealth) effect inducing higher expenditure in normal goods like home consumption, education and health services. But there is also a substitution effect. The elimination or reduction of expropriation risk makes investments in the home more attractive and therefore increases the “opportunity cost†of other forms of spending. The net effect on human capital is ambiguous. We present a simple model to illustrate this point and test it using a natural experiment in Uruguay. Our results confirm that titling favors home investment in detriment of some dimensions of educational and health care investment for children of 16 years or less.

Suggested Citation

  • Nestor Gandelman, 2009. "Inter-generational effects of titling programs: physical vs. human capital," Documentos de Investigación 50, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    • Handle: RePEc:avs:wpaper:50
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    References listed on IDEAS

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    1. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
    2. Erica Field, 2007. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1561-1602.
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    4. Néstor Gandelman, 2008. "Titling and Chronic Diseases: Evidence from A Natural Experiment in Uruguay," IDB Publications (Working Papers) 42938, Inter-American Development Bank.
    5. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
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    Cited by:

    1. Nestor Gandelman, 2009. "Demand constraints in a titling program in Uruguay," Documentos de Investigación 51, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    2. Steven B. Caudill & Stephanie O. Crofton & João Ricardo Faria & Neela D. Manage & Franklin G. Mixon & Mary Greer Simonton, 2020. "Property confiscation and the intergenerational transmission of education in post-1948 Eastern Europe," Public Choice, Springer, vol. 184(1), pages 1-41, July.

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