Property Rights and Economic Informality: Evidence from a Land Lottery in Argentina

Do secure property rights reduce economic informality? We study whether land titling and regularization increase households’ participation in the formal economy and whether titles also facilitate digital inclusion via access to online government services. We exploit a natural experiment from Bahía Blanca, Argentina, where the municipal government allocated serviced plots and construction materials to low-income applicants through a series of lotteries between 2010 and 2014. We merge the applicant registry for lottery winners and non-winners with administrative records on employment and social security from Argentina’s integrated pension and social security system, and with municipal data on registration and use of digital platforms for taxes and procedures. Leveraging the as-if random assignment of the project’s design, we estimate treatment effects instrumenting titling with lottery assignment, and explore heterogeneity by baseline characteristics. This project provides causal evidence on whether urban land titling can be a lever to reduce informality while also expanding access to government services. In doing so, we contribute to classic debates on the consequences of property rights for economic development.