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The impact of housing subsidy cuts on the labour market outcomes of claimants: Evidence from England

Daniel Borbely ()

Journal of Housing Economics, 2022, vol. 57, issue C

Abstract: Housing subsidies are aimed at helping low-income individuals afford appropriate housing, but are costly to offer and, in the view of some experts and policy makers, reduce incentives for claimants to participate in the labour market. This paper investigates the labour market impacts of recent housing subsidy cuts in England that were aimed at encouraging labour market participation and increasing work effort among claimants. I utilise variation in exposure to the subsidy cuts within a difference-in-differences framework and find limited evidence at the individual-level that claimants increased employment and labour force participation in response to the subsidy cuts. Nonetheless, these findings lack robustness and aggregate-level evidence suggests that the subsidy cuts did not succeed in encouraging employment or participation among claimants. Overall, my results show that labour market responses to the subsidy cuts were likely preempted by a strong mobility response, whereby claimants moved into other parts of the rental market to maintain subsidy coverage.

Keywords: Housing subsidies; Welfare programmes; Labour market behaviour (search for similar items in EconPapers)
JEL-codes: H31 H42 H53 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:57:y:2022:i:c:s1051137722000328

DOI: 10.1016/j.jhe.2022.101859

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