Why Are Low-Income Households Paying Increasingly High Rents? The Effect of Housing Benefit in France (1973-2002)
AbstractSince 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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Bibliographic InfoArticle 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)
Housing Benefit; Subsidy Incidence;
Find related papers by JEL classification:
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
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