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Housing insecurity, homelessness and populism: Evidence from the UK

Author

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  • Fetzer, Thiemo
  • Sen, Srinjoy
  • Souza, Pedro CL
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

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  • Fetzer, Thiemo & Sen, Srinjoy & Souza, Pedro CL, 2019. "Housing insecurity, homelessness and populism: Evidence from the UK," CEPR Discussion Papers 14184, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14184
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    Cited by:

    1. Elior Cohen, 2022. "The Effect of Housing First Programs on Future Homelessness and Socioeconomic Outcomes," Research Working Paper RWP 2022-03, Federal Reserve Bank of Kansas City.
    2. 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).

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    More about this item

    Keywords

    Housing insecurity; Homelessness and populism: evidence from the uk;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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