Are [sic] housing benefit an effective way to redistribute income?
G. Fack Labour Economics, vol.13, 2006, p.747-771 This study uses a French housing benefit reform to evaluate the impact of the subsidy on rent levels. The results indicate that one additional euro of housing benefit leads to an increase of 78 cents in the rent paid by new benefit claimants, leaving only 22 cents for the low-income household. The housing benefit reform led to increased demand from both low-income households and from students who used it to enable them to leave the parental home and become independent. This increase in demand was not matched by an increase in housing supply, leading to rent rises.
