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Why Are Low-Income Households Paying Increasingly High Rents? The Effect of Housing Benefit in France (1973-2002)

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  • Gabrielle Fack

    (PSE)

Abstract

Since the late 1970s, means-based rent assistance has become the main housing policy instrument to the detriment of building subsidies. Yet the development of this assistance has gone hand in hand with an increase in the cost of housing for the most disadvantaged tenant households. We seek to evaluate the impact of this on the increase in rents for low-income households. The early-1990s reform of the extension of assistance constitutes a natural experiment whereby the effects of housing benefits can be isolated, since it was applied solely to certain types of households and not others. We use data from the INSEE Housing surveys to show that the assistance could well have a lot to do with the increase in rents per square metre for low-income households. The estimates obtained show that 50% to 80% of the housing benefit received by these households has been absorbed by increases in their rents.

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File URL: http://www.insee.fr/fr/ffc/docs_ffc/ES381-382b.pdf
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Bibliographic Info

Article provided by Institut National de la Statistique et des Etudes Economiques in its journal Economie et Statistique.

Volume (Year): 381-382 (2005)
Issue (Month): (October)
Pages: 17-40

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Handle: RePEc:crs:ecosta:es381-382b

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Related research

Keywords: Housing Benefit; Subsidy Incidence;

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  1. Susin, Scott, 2002. "Rent vouchers and the price of low-income housing," Journal of Public Economics, Elsevier, vol. 83(1), pages 109-152, January.
  2. Edgar O. Olsen, 2001. "Housing Programs for Low-Income Households," NBER Working Papers 8208, National Bureau of Economic Research, Inc.
  3. David le Blanc & Anne Laferrère, 2002. "Comment les aides au logement affectent-elles les loyers ?," Économie et Statistique, Programme National Persée, vol. 351(1), pages 3-30.
  4. Gérard Curci, 1991. "Portrait du locataire," Économie et Statistique, Programme National Persée, vol. 240(1), pages 19-28.
  5. Catherine Villeneuve-Gokalp, 2000. "Les jeunes partent toujours au même âge de chez leurs parents," Économie et Statistique, Programme National Persée, vol. 337(1), pages 61-80.
  6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
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