Housing Allowance and the Rent of Low-income Households

Aki Kangasharju ()

No 458, Discussion Papers from VATT Institute for Economic Research

Abstract: This paper analyses the effect of a housing allowance programme on the rent paid by assisted low-income households. The data consist of some 12,000 rental households in the free market and municipal sectors during 1994–2003. The effect of the scheme is estimated using the programme reform of 2002 as an instrument. The reform increased the allowance of the already assisted households to various degrees depending on the location, size and age of housing, but had little effect on the eligibility for allowance. Results suggest that in the private sector an additional one euro of allowance increases the rent of claimants by 60–70 cents. The effect is zero in the municipal sector, due to the way rents are set. JEL: H24, R21

Keywords: Housing allowance; Rental housing; Price of housing; Social security; Sosiaaliturva; Effectiveness of public services; Julkisten palvelujen vaikuttavuus (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)

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Journal Article: Housing Allowance and the Rent of Low‐income Households (2010)
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