The Consequence of Housing Allowance Removal in Labor Market. Evidences from Sweden

Whether and how housing benefits affect recipientís self-sufficiency is a much-debated housing policy issue. This paper examines the employment effects of housing allowance at the time of removal. To be specific, it compares the before-and-after labor market performances between the population groups that affected and unaffected by Swedish 1996 housing allowance system reform, which excluded elder childless households from housing allowance coverage. Applying difference-in-difference matching estimation approach, the major findings suggest: although it appears that male recipients were hardly affected, there are quite strong evidences to suggest that female recipients were severely harmed by the exclusion from housing allowance. For some disadvantaged groups, immigrant female and poorer females particularly, their losses were astoundingly high. It is also found that, all the female recipient groupsí losses of labor earnings are much higher than the housing benefits they previously got. This study implies there is a close association between householdís housing consumption and labor market behavior. It highlights the importance to integrate labor market consequence into the designs of housing policy and housing policy reform.