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Abstract
This paper addresses the impact on housing consumption of a decrease in
the housing allowance paid to single-parent recipients living in rental
apartments. We take advantage of a limit on recipient dwelling size,
imposed in Swedish housing allowance reform in 1996–1997, that arguably
comes close to constituting a natural experiment. Data for this study were
extracted from the Swedish National Insurance Agency’s database on
housing allowance recipients, which comprises data previously unavailable
for research. The present results suggest that tying housing allowances to
housing conditions indeed affects housing consumption. The objective of
housing allowances is to induce households to move into better housing,
thereby increasing their housing consumption. However, the constraint on
dwelling size instead seemed to create a lock-in effect, i.e., the size limit
increased the likelihood of a household experiencing overcrowding instead
of inducing households to move into better, larger housing.
Keywords:
Housing allowance; Housing consumption; Lock-in effect;
Overcrowded housing
