Housing Insecurity, Homelessness and Populism: Evidence from the UK

81 Pages Posted: 17 Dec 2019 Last revised: 2 Mar 2020

See all articles by Thiemo Fetzer

Thiemo Fetzer

University of Warwick

Srinjoy Sen

University of Warwick

Pedro CL Souza

University of Warwick

Date Written: December 2019

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

Keywords: homelessness and populism: Evidence from the UK, Housing insecurity

JEL Classification: D72, H2, H3, H5, P16

Suggested Citation

Fetzer, Thiemo and Sen, Srinjoy and Souza, Pedro CL, Housing Insecurity, Homelessness and Populism: Evidence from the UK (December 2019). CEPR Discussion Paper No. DP14184, Available at SSRN: https://ssrn.com/abstract=3504613

Thiemo Fetzer (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Srinjoy Sen

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Pedro CL Souza

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

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