Beginning in the late 1970s, the incidence of homelessness increased substantially--especially in American cities. Most analyses of the rise of homelessness emphasize social pathologies--mental illness, drug abuse, criminal behavior--in explaining the appearance of the "new homeless." This paper reviews Brendan O'Flaherty's monograph Making Room, which, in contrast, advances a purely economic theory of the rise of homelessness. According to this novel theory, the rise of homelessness can be attributed to the increased dispersion in the income distribution during the past 15 years. The paper reviews and criticizes the empirical evidence supporting O'Flaherty's theory and its policy implications.
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Volume (Year): 34 (1996)
Issue (Month): 4 (December)
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