The (Many) Consequences of the Housing Affordability Problem in the EU: A Machine-Learning Empirical Analysis

Jean-Jacques Hallaert and Iglika Vassileva

No 2026/124, IMF Working Papers from International Monetary Fund

Abstract: Housing affordability is high on the economic, social, and political agenda in Europe. While the economic literature has mostly analyzed the drivers of housing unaffordability, this paper focuses on its consequences, quantifying, at the EU level, its impact on individuals’ well-being as well as its economic and demographic impact. We find that the impact of an increase in housing cost burden is large on housing adequacy as well as on poverty and health. It is somewhat smaller on fertility and labor force participation.

Keywords: Housing Affordability; Housing Availability; Housing Adequacy; Labor Force Participation; Fertility; Poverty; Health; Fiscal Spending; Machine-Learning; housing cost; IMF working papers; housing price; Housing; Income; Disposable income; Housing prices; Europe (search for similar items in EconPapers)
Pages: 60
Date: 2026-06-19
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