Two Floors: Housing Benefit, the Public Pension and the Shape of Income among Older People Living Alone

Samir Orujov ()
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Samir Orujov: UBS - Université de Bretagne Sud, LMBA - Laboratoire de Mathématiques de Bretagne Atlantique - UBS - Université de Bretagne Sud - UBO EPE - Université de Brest - CNRS - Centre National de la Recherche Scientifique, ADA University, Baku, Azerbaijan.

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Abstract: The disposable income of Danes aged 65 and over who live alone is bimodal. In register data from the Luxembourg Income Study for 2004–2019, a test of unimodality for binned incomes rejects for this group from 2013 onwards, and for those who live on public transfers it rejects in every wave. The two modes are the public pension without and with the pensioners' housing benefit. Within each group income is unimodal once those with sizeable public contributory pensions are set aside; the gap between the modes is close to the median benefit; the recipients are renters and most non-recipients are owners; and removing the benefit from income removes the second mode. In the two large recent waves the at-risk-of-poverty line falls in the valley between the modes. With LIS waves pooled, the same structure appears in the Netherlands, the United Kingdom and, while its housing allowance separated recipients from non-recipients, France, and there too subtracting the allowance removes the second mode; in Norway, Sweden, Germany, the United States and Ireland, where few people live on the floor, few of those on it receive the allowance, or the allowance does not separate them, no second mode is due to the allowance. A statutory floor shapes the income distribution when a large share of a group lives on it, and a second transfer that only some of them receive splits it in two.

Keywords: income distribution; bimodality; minimum pension; housing benefit; one-person households; Luxembourg Income Study (search for similar items in EconPapers)
Date: 2026-10-01
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