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
Pedro CL Souza: University of Warwick

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Homelessness and precarious living conditions are on the rise across much of the Western world. This paper exploits quasi-exogenous variation in the affordability of rents due to a cut to rent subsidies for low income benefit in the United Kingdom in April 2011. Using individual-level panel data as motivating evidence, we document that individuals exposed to the cut were significantly more likely to build up rent arrears and face evictions; further, they were more likely to endogenously attrit from the panel. Using comprehensive district-level administrative data, we show that the affordability shock caused a significant increase in: evictions; individual bankruptcies; property crimes; insecure temporary housing arrangements; statutory homelessness and actual rough sleeping with most notable rise in statutory homelessness among families with children. We also note political effects: the cut reduces electoral registration rates, and is associated with lower turnout and higher support for Leave in the 2016 EU referendum, likely capturing a change in composition of those that engage with democratic processes. Lastly, we estimate that the fiscal savings were much lower than anticipated: for every pound saved by the central government, council spending to meet statutory obligations for homelessness prevention increased by 53 pence, rendering the cost savings much smaller than expected.

Keywords: housing markets; welfare cuts; austerity; voting JEL Classification: H2; H3; H5; P16; D72 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cdm, nep-eur, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://warwick.ac.uk/fac/soc/economics/research/c ... 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:cge:wacage:444

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