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

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  • Borbely, Daniel

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.

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  • Borbely, Daniel, 2022. "The impact of housing subsidy cuts on the labour market outcomes of claimants: Evidence from England," Journal of Housing Economics, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:jhouse:v:57:y:2022:i:c:s1051137722000328
    DOI: 10.1016/j.jhe.2022.101859
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    1. Paul Fisher & Omar Hussein, 2023. "Understanding Society: the income data," Fiscal Studies, John Wiley & Sons, vol. 44(4), pages 377-397, December.

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    More about this item

    Keywords

    Housing subsidies; Welfare programmes; Labour market behaviour;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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