Housing Policy Impacts on Poverty and Inequality in Europe

Guillaume Bérard and Alain Trannoy
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Alain Trannoy: AMSE

No 640, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Poor housing conditions are detrimental to household members' health, schooling, and social interactions. Developed countries have responded to the challenge of improving housing for the poor using two main instruments: cash housing benefits and/or social housing. In this paper, we assess how effective they are in reducing households' housing poverty and inequality by comparing them separately and combined, with a counterfactual situation with no housing policies, examining 27 European countries by using harmonized data from the EU-SILC. We find that (1) cash housing benefits are more effective than in-kind housing benefits (social housing) and more effective in reducing poverty than inequality. (2) Some countries, and especially Finland, achieve a higher reduction in inequality and poverty while spending only half of the UK. (3) Based on an econometric estimate, we show evidence that in almost all countries outright ownership is the most advantageous tenure status. (4) Inequality in housing expenses is comparable to that in consumption expenditure (excluding housing costs), which is, in turn, much higher than inequality in housing services (a difference of 10 Gini points on average).

Keywords: Housing policy; Housing consumption; Inequality; Poverty (search for similar items in EconPapers)
JEL-codes: D31 D63 H23 I32 (search for similar items in EconPapers)
Pages: 86 pages
Date: 2023-03
New Economics Papers: this item is included in nep-eec, nep-eur and nep-ure
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