Housing market policies generate benefits in the form of positive externalities of home-ownership and redistribution gains from social housing. However these types of hous-ing weaken the labour market position as they increase the transaction costs of mov-ing. Therefore the benefits of housing policies that promote homeownership or living in social housing might be offset at the labour market. This is tested by estimating a wage regression as a function of housing market tenure type. Results are based on a large panel for the years 2006 through 2008 based on administrative records, in which individual housing market tenure type is instrumented using local housing market structure. We conclude that homeownership does not affect wages, and that living in social housing reduces the wage rate with 4.8 percent. For the average fulltime worker living in social housing the negative effect on wages reduces the redistribution bene-fits with 1,700 euro annually, which equals almost fifty percent of his redistribution benefits. Joint with Wolter H.J. Hassink.

JEL: H23, J31, J33, R31

Keywords: Wages, Home-ownership, Social housing, Rent control, Redistribution