Housing insecurity, homelessness and populism: Evidence from the UK

Thiemo Fetzer, Srinjoy Sen and Pedro CL Souza
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Srinjoy Sen: University of Warwick and CAGE, Department of Economics
Pedro CL Souza: University of Warwick and CAGE, Department of Economics

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Homelessness and precarious living conditions are on the rise across much of theWesternworld. This paper exploits exogenous variation in the affordability of rents due to a cut that substantially lowered housing benefit – a welfare benefit aimed at helping low income households pay rent. Before April 2011, local housing allowance covered up to the median level of market rents ; from April 2011 onwards, only rents lower than the 30th percentile were covered. We exploit that the extent of cuts significantly depend on statistical noise due to estimation of percentiles. We document that the affordability shock caused a significant increase in : evictions ; individual bankruptcies ; property crimes ; share of households living in insecure temporary accommodation ; statutory homelessness and actual rough sleeping. The fiscal savings of the cut are much smaller than anticipated. We estimate that for every pound saved by the central government, council spending to meet statutory obligations for homelessness prevention increases by 53 pence. We further document political effects : the housing benefit cut causes lower electoral registration rates and is associated with lower turnout and higher support for Leave in the 2016 EU referendum, most likely driven by its unequal impact on the composition of those that engage with democratic processes.

Keywords: housing markets; welfare cuts; austerity; voting (search for similar items in EconPapers)
JEL-codes: D72 H2 H3 H5 P16 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eur and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://warwick.ac.uk/fac/soc/economics/research/w ... fetzer_sen_souza.pdf

Related works:
Working Paper: Housing insecurity, homelessness and populism: Evidence from the UK (2019)
Working Paper: Housing insecurity, homelessness and populism: Evidence from the UK (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1232

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